(a) An employee receiving wages is entitled to the exemptions for which the employee qualifies under Article 4 of this Chapter.
(b) Every employee shall, at the time of commencing employment, furnish his or her employer with a signed withholding exemption certificate informing the employer of the exemptions the employee claims, which in no event shall exceed the amount of exemptions to which the employee is entitled under the Code. If the employee fails to file the exemption certificate the employer, in computing amounts to be withheld from the employee's wages, shall allow the employee the exemption accorded a single person with no dependents.
(c) Withholding exemption certificates shall take effect as of the beginning of the first payroll period that ends on or after the date on which the certificate is furnished, or if payment of wages is made without regard to a payroll period, then the certificate shall take effect as of the beginning of the miscellaneous payroll period for which the first payment of wages is made on or after the date on which the certificate is furnished.
(d) If, on any day during the calendar year, the amount of withholding exemptions to which the employee is entitled is less than the amount of withholding exemptions claimed by the employee on the withholding exemption certificate then in effect with respect to the employee, the employee shall, within 10 days thereafter, furnish the employer with a new withholding exemption certificate stating the amount of withholding exemptions which the employee then claims, which shall in no event exceed the amount to which the employee is entitled on that day. If, on any day during the calendar year, the amount of withholding exemptions to which the employee is entitled is greater than the amount of withholding exemptions claimed, the employee may furnish the employer with a new withholding exemption certificate stating the amount of withholding exemptions which the employee then claims, which shall in no event exceed the amount to which the employee is entitled on that day.
(e) Withholding exemption certificates must be in the form and contain the information required by the Secretary. As far as practicable, the Secretary shall cause the form of the certificates to be substantially similar to federal exemption certificates.
(f) In addition to any criminal penalty provided by law, if an individual furnishes his or her employer an exemption certificate that contains information which has no reasonable basis and that results in a lesser amount of tax being withheld under this Article than would have been withheld if the individual had furnished reasonable information, the individual is subject to a penalty of fifty percent (50%) of the amount not properly withheld. (1959, c. 1259, s. 1; 1973, c. 476, s. 193; 1981 (Reg. Sess., 1982), c. 1277; 1989, c. 728, s. 1.43; 1997-109, s. 2.)
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Last modified: March 23, 2014