Tax Witholding Information
Federal, State and County Tax Withholding
In compliance with State and Federal regulations, the University withholds income tax from wage and salary payments made to employees. Refer to the most recent withholding tables posted on the Tax Department website to determine the amount of tax to be withheld from an employee's salary or wage payments.
- All employees must complete an Employee's Withholding Allowance Certificate (Department of the Treasury Form W-4) to be used in determining the proper federal income tax to be withheld from their salary and wage payments. This form should be forwarded to the Shared Service Center immediately following completion.
- An employee may request that an amount in excess of the regular withholding be deducted from his/her salary by completing the appropriate form W-4 or Wh-4.
- An employee may be entitled to claim exemption from the withholding of Federal Income Tax if he/she incurred no liability for income tax for the preceding taxable year and he/she anticipates that he/she will incur no tax liability for the current taxable year. The employee must write "exempt" in the exempt block on Form W-4 (Employee's Withholding Allowance Certificate) in order to claim complete exemption. This exemption does not affect the withholding of State Income Tax or the Social Security Tax. This is a yearly election.
- Salary and wage payments made to non-resident employees for performing services outside the State of Indiana are exempt from the withholding of State Income Tax. Individuals in this category must file a Payroll Form 52A with the Tax Department claiming the exemption.
- Employees who are residents of Wisconsin, Kentucky, Michigan, Ohio and Pennsylvania may claim exemption from State Tax Withholding by completing the Certificate of Residence Form (Business Office Form 52) and returning it to the Tax Department.
- Employees who are residing or working in one of the counties that have adopted the County Adjusted Gross Income Tax (CAGIT), the County Option Income Tax (COIT), or the County Economic Development Income Tax (CEDIT) are liable for the tax. All employees must complete Employee's Withholding Exemption and County Residence Certificate (Indiana Department of Revenue Form WH-4) at the time of employment or anytime they change counties of residence or work during the year. The county of residence and county of work, as of January 1 each year, will determine the payment or non-payment of the CAGIT and the COIT for the entire year. When a new WH4 is submitted, the year to date county taxes will be recalculated based on the new counties back to January 1 of the current year. The effect of this county tax change will be reflected on the employee's first paycheck after the new WH4 is submitted. This form should be forwarded to the Shared Service Center immediately following completion.
- Employees who are classified as non-resident aliens may be eligible to claim exemption from U.S. income tax withholding under a tax treaty between the U.S. and the country of which the non-resident alien employee is a resident. In addition, these employees may be exempt from the withholding of Social Security tax if they have an F-1 or J-1 visa. Purdue University uses a web-based tax compliance system, called Glacier, to assist in determining the proper tax withholding for non-resident alien. The business office will establish the employees' Glacier account. The non-resident alien will complete their Glacier record and turn in all Glacier and immigration documents required to the Tax Department.
Non-resident alien employees who do not qualify for treaty-exemption are subject to U.S. income tax withholding. These employees are required to claim "single" marital status, one allowance. Students from India are exempt from the required "single" marital status. Residents of Canada, Mexico, and American Samoa are entitled to the same personal allowances as U.S. citizens. (See Personal Allowance Worksheet on form W-4). Japanese and Koreans are entitled to claim one allowance for themselves, their spouse and dependent children who are present with them in the U.S.
Summary Report of Tax Deduction
In January of each year, the Tax Department prepares and distributes to departments an individual summary of earnings and taxes withheld during the past calendar year. The summary is on a Wage and Tax Statement (U.S. Treasury Form (W-2) and shows gross taxable salary and total deduction for both State and Federal Taxes. The W-2s are to be distributed to employees by the department for use in computing individual tax returns.