Most payments to employees will have Federal Withholding Tax deducted based on the IRS Semi-Monthly Tax Withholding Table, the IRS Form W-4 Withholding Allowance Certificate and any pre-tax deductions currently in place. See Payroll Tax Deductions for additional information.
The exceptions to this are for payments made separately from salary payments.
- Supplemental wage payments have a Federal Withholding Tax rate of 25%. Supplemental Wage payments might include but are not limited to Awards and Employee Separation Authorization Payments (vacation time paid at the time of separation).
- Taxable fringe benefits have a Federal Withholding Tax rate of 25%. Taxable fringe benefits might include, but are not limited to gift certificates, moving expenses, sports tickets, and non-job related graduate student tuition over the IRS Section 127 exemption limit.
- Employee benefits such as health care and retirement are pre-tax reductions and are not included as part of the employee’s taxable income. More information is available on the Benefits Office website.
- Stipend is an earnings type used to pay a scholarship or fellowship. A scholarship is generally an amount paid or allowed to a student at an educational institution for the purpose of study. A fellowship is generally an amount paid to an individual for the purpose of research.
- Scholarship/fellowship payments are not considered wages, and are not reported on Form W-2.
- Scholarship/fellowship payments will be reported at year end on tax form 1098-T.
- Scholarship/fellowship payments may be paid to individuals who are not students at the University of Washington. At year end, this payment information will be summarized in a letter from the Payroll Office.
- IRS Publication 970 Tax Benefits for Education has further guidance for scholarship and fellowship payments.
- Form W-4 is used to withhold the correct federal income tax from an employee’s pay on wages NOT to be used for withholding tax on stipend/scholarship/fellowship payments. UW does not withhold federal tax for Stipends.
IRS Form W-4: Employee’s Withholding Allowance Certificate
- This should be completed by an employee so the University of Washington can withhold the correct federal income tax from an employee’s pay.
- W-4 updates should be made through Employee Self Service. In ESS, it is located under the Taxes tab. It can be updated at any time throughout the year.
- Exempt status on the IRS Form W-4 is valid for one year. If an employee can claim exempt, the form must be renewed each year by February. If W-4 information is not renewed or updated on time, then by IRS law the employee’s 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.
- Foreign National employees have special rules for filling out IRS Form W-4.
- The IRS Withholding Calculator can assist you in determining how to fill out the IRS Form W-4.
If you are receiving a supplemental pension from the University of Washington, you will need to fill out IRS Form W-4P. If you have questions about your supplemental pension, please contact the UW Benefits Office at (206)543-2800 or firstname.lastname@example.org.