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rharge1
New Member

Non-profit employee - Withhold Federal Income Tax?

Starting in 2016, my wife began working for a non-profit organization. She received her W2 today, however, no federal taxes were withheld.

I doubt it, but are non-profit employees exempt from federal income tax? Or does it look like her company failed to collect federal income tax?

She did turn in a W4 when she began employment. She plans to talk to her company about it, but she doesn't go back to work until next week.

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3 Replies

Non-profit employee - Withhold Federal Income Tax?

No, employees of non-profits, as a general rule, are not exempt from federal income tax. Sorry.

When she filed the W-4 with her company, she might have indicated on the W-4 that she swore that she was not liable for federal withholding. It's rare, but it happens.

However, if your spouse is like most employees of a non-profit, she will owe federal income tax, and the company should have been withholding at a rate consistent with the information she gave on the W-4.

Yes, she needs to talk to the company. There may be other, rare circumstances that the company is aware of.

dd_bills
New Member

Non-profit employee - Withhold Federal Income Tax?

The same thing happened with my wife.  I told her to claim six on the W-4, which she did, but when I got her W2, they had taken nothing out for federal.  When she inquired with the company, they said she didn't make enough (she's part-time, earning about $25K/year) to have federal withheld.  I think they are either inept or misinformed.  Help!
rharge1
New Member

Non-profit employee - Withhold Federal Income Tax?

So I figured this out on my side (I asked the original question). I claim 3 federal allowances in my W-4. 3 is good for me, I get more money in my paycheck, and I don't owe taxes in April. It balances out well based on my deductions and credits.

So when my wife filled out her W-4 last year, I told her to claim 3 as well. HOWEVER, her paycheck is smaller than mine (she works part time), and 3 allowances against her pay is enough to not pay any federal taxes.
 
dd_bills - I'm guessing 6 allowances against your wife's pay is higher than the amount she would have paid it taxes, so she paid none. My wife will be claiming 0 this year so we don't pay all of her federal tax when we do our taxes.
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