TAP A06-001

W4 & W4P

Issue Statement:

The Form W-4, Employee’s Withholding Allowance Certificate ignores pension income which causes confusion to  taxpayers who have a job but are also getting a pension and social security.

Proposal:

Add a reference to form W-4P, Withholding Certificate for Pension or Annuity Payments, to the Form W-4.

Response Notes:

The Forms and Publication Unit is currently in the process of adding a sentence to the 2007, Form W-4, Employee’s Withholding Allowance Certificate, under “Purpose” indicating:  “File the Form W-4P to adjust your withholding for pensions.”