Methods of Witholding - Voluntary Witholding

If an employee receives income that is not related to employment, he may have an additional amount withheld from his wages to cover his expected federal tax on that income. The additional amount to be withheld is entered on line 6 of the employee's Form W-4 (Employee's Withholding Allowance Certificate).

Voluntary Withholding from Non-wage Payments

An employee and his employer may enter into an agreement to provide for voluntary federal withholding on payments that are excluded from the definition of wages for withholding purposes. The request, on Form W-4, becomes effective upon acceptance by the employer (acceptance being conveyed by the initiation of the additional withholding). The agreement remains in effect until its stipulated termination date or until both the employer and the employee mutually agree upon termination. Either the employer or the employee may terminate an agreement prior to its stipulated or mutually agreed upon termination date by furnishing a signed, written notice of termination to the other.

Payroll-Taxes.com is a free online resource featuring a compilation of research, collaboration and web tools for use by payroll professionals and more including information about payroll tax articles, federal tax information and state tax information.