Tax Withholding Information For US Citizens
Federal Withholding Tax
Overview
Most payments to employees have Federal Withholding Tax deducted based on the IRS Semi-Monthly Tax Withholding Table, your IRS Form W-4 Withholding Allowance Certificate, and any pre-tax deductions you have elected.
Payments made separately from salary payments are exceptions to the withholding tax guidelines, as follows:
- Supplemental Wage payments (e.g., Awards, Employee Separation Authorization Payments—vacation time paid at separation from the UW—as well as some other payments) have a Federal Withholding Tax rate of 22%.
- Taxable Fringe Benefits (e.g., gift certificates, moving expenses, sports tickets, non-job related graduate student tuition over the IRS Section 127 exemption limit, as well as some other payments) have a Federal Withholding Tax rate of 22%.
- Employee benefits such as health care and retirement are pre-tax reductions and are not included as part of your taxable income.
- Stipend Payments
- Scholarship and fellowship payments are not considered wages, and are not reported on Form W-2. Such payments are reported at year end on IRS Form 1098-T.
- Scholarship and fellowship payments may be paid to individuals who are not students at the University of Washington. At year end, information on such payments are summarized in a letter from the ISC.
- For additional information on scholarship and fellowship payments, see IRS Publication 970 Tax Benefits for Education (PDF).
- The UW does not withhold federal tax for stipends, scholarships, or fellowships. Withholding information on the Form W-4 does not apply to such payments.
University of Washington employees cannot provide personal, legal, or tax advice.
Calculating Your Federal Tax Withholding
Guidance about calculating your Federal withholding can be found on the Calculating Your Withholding page.
Setting Your Withholding Elections (IRS Form W-4)
New Employees – Set your initial withholding elections:
Your IRS Form W-4 must be completed in Workday so that the UW can withhold the correct federal income tax from your pay. Refer to the Add Federal Withholding Elections User Guide for details.
Update your current withholding elections:
Changes to your IRS Form W-4 in Workday can be made at any time throughout the year. Refer to the Update Federal Withholding Elections User Guide for details.
Abbreviated versions of the procedure to update your withholding elections have been translated into a number of languages, and are available for download on the Quick Guides – Translations page.
Foreign Nationals:
Foreign National employees have special rules for filling out IRS Form W-4.
Considerations
- Exempt status on the IRS Form W-4 is valid for one year. If you are eligible to claim Exempt, your W-4 must be renewed each year by February. If your W-4 information is not renewed or updated on time, by IRS law your tax status automatically defaults to the Single tax tables and zero allowances.
- The University of Washington will not refund federal withholding taxes due to either late or incomplete IRS Form W-4 information.
Additional Withholding Forms Requirements
If you are receiving a pension from the University of Washington, you will need to complete an IRS Form W-4P Withholding Certificate for Pension or Annuity Payments. This must be done on paper and submitted to the ISC.
If you are receiving a supplemental pension from the University of Washington, you will need to fill out IRS Form W-4P Withholding Certificate for Pension or Annuity Payments. If you have questions about your supplemental pension, contact the ISC.
Social Security and Medicare (OASDI)
Overview
Social Security and Medicare (OASDI) are mandatory federal payroll taxes. Federal Insurance Contributions Act (FICA) is the combined employee and employer portions of mandatory OASDI taxes.
Social Security is withheld on taxable gross income up to an annual wage limit each year. Medicare is withheld on taxable gross income. The rate is increased when the minimum subject gross threshold is crossed.
Exceptions to OASDI taxation include:
- IRS Student FICA exemption. To qualify, you must be:
- in a student job class, and
- attending school full time, and
- working for an educational institution.
- Scholarship and Fellowship stipends
- Foreign National employees may be exempt under certain circumstances.
Calculating Your Social Security and Medicare Withholding
Guidance about calculating your Social Security and Medicare withholding can be found on the Calculating Your Withholding page.
Paid Family and Medical Leave
Refer to the WA Employment Security Department website for information.
WA Medical Aid/Worker’s Comp
Refer to the WA State Department of Labor & Industries website for information.
Guidance about calculating your Medical Aid withholding can be found on the Calculating Your Withholding page.
Working Outside WA State
We strongly recommend out-of-state employees and their supervisors review UWHR’s Remote Work Location and Out-of-State Work Policy.
State Income Tax
Employees working and residing in Washington have no state income tax liability. However, if you are working in a state that does have an income tax, the UW is required to withhold income tax for the state(s) in which your services are performed.
To ensure your taxes will be withheld correctly, employees working in a state with an income tax should:
1. Verify that your Home (Primary) Address in Workday is accurate.
The Home Address you have specified in Workday must reflect your tax residency address. Visit the Managing Your Personal and Work Information in Workday page for guidance.
2. Fill out additional state withholding tax forms in Workday if/as needed.
Refer to the State and Local Withholding Elections User Guide for guidance.
-
Administrators who support employees working in a state with an income tax should verify that the Employee’s Work Location in Workday is set to their state of residence, and correct it if not. If the employee’s Work Location in Workday is set to a WA state address, their pay will be subject to Washington state taxes.
To verify the employee’s work location, navigate to their Worker Profile page in Workday and, under Job Details, review Location. If the Work Location needs to be updated, follow the guidance found in the Change Job – Data Change – Voluntary Location or Work Shift Change User Guide.
If you have questions, contact the ISC and include “Payroll Tax Inquiry” in the Subject.
US Citizens Working Abroad
Guidance for Foreign Nationals working abroad can be found on the Foreign Nationals Payment & Tax Information page.
Because payments to employees who work outside of the US might not be subject to federal withholding tax, Washington State Medical Aid/Worker’s Compensation taxes or Paid Family Medical Leave tax, steps must to be taken to help ensure you are taxed correctly. Expand the appropriate menu below for guidance.
Please note that there is an annual earned income exemption limit for federal withholding tax exemptions. Additionally, federal withholding tax is not withheld if it is reasonable to believe that an employee’s wages would be excluded under the Foreign Earned Income exclusions. For further details, refer to the IRS’s Publication 54 Tax Guide for US Citizens and Resident Aliens Abroad (PDF).