Payroll Taxes: Federal and State W-4 Tax Withholding
Federal and State Forms W-4 tells an employer how many withholding allowances to use when deducting Federal and State Income Tax from an employee's pay.
Payroll staff cannot assist in determining the number of allowances you can claim, nor can they offer tax guidance on an employee’s proper withholding status. For detailed instructions and a worksheet to help determine your correct number of Federal withholding allowances go to the IRS Tax Withholding Calculator.
If you fail to submit a Federal or State Form W-4, your taxation status will default to Single with zero allowances.
The Federal and state Forms W-4 can be changed as many times as necessary. To update your Federal and State Forms W-4 go to Employee Self Service. Once the Federal and state Form W-4 has been updated in Employee Self-Service, the change will take effect in the next payroll. You will receive an email notification from Dartmouth Payroll that the change has been made; if you did not initiate this change, contact Payroll immediately. You should monitor your payslip to verify the change has been processed. This information will be recorded on your stub in the upper left hand corner, titled "TAX DATA." In order to claim exemption from Federal tax you must update your Federal W-4 information in Employee Self Service and check the “Exempt” box after reading the “Exempt from Withholding” statement.
The IRS has strict guidelines for claiming exemption from withholding. For further information, please visit the IRS website and see Publication 505. You must file a new Federal W-4 every year (in February of the current tax year) if you wish to claim the exemption from Federal taxes for that tax year.
Payroll Taxes: Students
Enrolled students do not have to pay Social Security or Medicare taxes.
Because students who are on leave term are not currently enrolled, any wages earned while on leave term will be subject to Social Security and Medicare taxes.
Departments may offer to pay a portion of relocation expenses when hiring new employees. See information on the relocation of new employees in the Business Expense Policy for more information. Reimbursement for relocation expenses paid to or on behalf of an employee will be taxable to the employee.
Employee Recruitment Expenses
Before an Offer is Accepted
Payment of authorized recruitment expenses (such as airfare, lodging, and meals) incurred during the employee recruitment process are not taxable to the prospective employee.
After an Offer is Accepted
After an offer of employment has been accepted, the employee/employer relationship is established and pre-move house hunting expenses (such as airfare, lodging, and meals) incurred by the employee and family are considered taxable income if reimbursed.
Free Tax Assistance for Military Personnel
If you or your spouse are a member of the military, you may be eligible to receive free tax return preparation assistance. The U.S. Armed Forces participates in the Volunteer Income Tax Assistance program and provides free tax advice, tax preparation, return filing and other tax assistance to military members and their families.
For more information, review IRS Publication 3, Armed Forces' Tax Guide, available on the IRS website or order a free copy by calling 800-TAX-FORM (800-829-3676).
State Sales Tax Exempt Certificates
As a federally tax-exempt institution, Dartmouth College is also classified as an exempt organization in many, but not all, states. This means that the College is exempt from "transactions privilege" and/or sales tax in these states.
Currently, the College has tax-exemption certificates for 19 states. These certificates allow an exemption for purchases made by the College in the ordinary course of conducting its educational and research activities. Note that many of these states do not extend this exemption to room and meals taxes. In some cases, certain conditions or documentation requirements must be met before the exemption is granted. These may include:
- The exemption certificate number must be provided to the supplier when the purchase is made;
- Various forms found on the state's website must accompany the certificate at the time of purchase;
- All purchases must be billed directly to the College and paid for by the College.
If you have questions about state tax exemption certificates, please contact Rachel Williamson at Tax@Dartmouth.edu.
Foreign Bank Account Filing Requirements
Under the Bank Secrecy Act and applicable Treasury Regulations, U.S. persons generally must electronically file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (commonly referred to as an "FBAR"), by April 15 of the year following any year during which they possessed signature or other authority over, or had a financial interest in, foreign financial accounts whose aggregate value exceeded $10,000 at any time during such calendar year.
The Financial Crimes Enforcement Network (FinCEN) has mandated electronic filing of the FBAR, effective for calendar year 2013 and forward.
The Controller's Office issues guidance and prepares certain parts of the FBAR for those Dartmouth personnel who have an FBAR filing requirement annually. FBAR forms for the current year prepared by the Controller's Office must be received by the Department of the Treasury by April 15 of the following year (e.g. calendar year 2019 files by April 15, 2020).
If you have any questions about your Dartmouth-related FBAR filing requirement, please email the Tax Office.