42.17.131 EMPLOYEE'S WITHHOLDING ALLOWANCES

(1) For purposes of determining the employee's withholding allowances and withholding exemptions, the department provides Form MW-4. The department has determined that the federal child tax credit that allows extra allowances for federal withholding is not allowed for Montana purposes when determining the number of allowances for Montana withholding.

(2) Exempt status claimed for federal purposes does not exempt an employee's wages from withholding requirements for Montana purposes.

(3) If an employee fails or refuses to provide the number of allowances on Form MW-4 reported on the line stating "total number of allowances," the employer shall withhold, for Montana purposes, on the basis of zero withholding allowances.

(4) The department may revise the number of withholding allowances claimed to a maximum allowed for state tax purposes.

(a) For any Form MW-4 on which an employee has claimed more than ten withholding allowances, the following apply:

(i) The employer must provide the department with an electronic copy of the Form MW-4 provided by the employee as described in (5).

(ii) The employer must continue to withhold based on the most recently filed Form MW-4 with fewer than 11 allowances claimed. If no Form MW-4 with fewer than 11 allowances was previously filed, the employer shall withhold for Montana purposes on the basis of zero withholding allowances.

(iii) If upon review, the department determines that the Form MW-4 provided is defective, the department may require that the employer disregard the allowances claimed and advise the employer in writing of the maximum number of withholding allowances permitted the employee.

(b) The filing of a new Form MW-4 by an employee whose withholding allowances have been set at a fixed maximum number by the department shall be disregarded by the employer unless a number equal to or fewer than the set maximum is claimed or written notice by the department is given authorizing a different maximum.

(i) exemptions provided under 15-30-2114, 15-30-2115, and 15-30-2116, MCA;

(ii) marital status and number of employers;

(iii) estimated wages and salaries;

(iv) allowable deductions under 15-30-2132, MCA;

(v) any Montana net operating loss deduction carryover or allowable tax credit carried over from past years;

(vi) annuity plan contributions; and

(vii) residency.

(d) If the department does not have sufficient information to determine the maximum number of permitted allowances, the department shall use its best estimate of the employee's eligible exemptions when determining the withholding allowances.

(5) Employers shall provide a copy of an employee's Form MW-4 no later than the last day of the payroll period during which the employer received the form, if more than ten allowances or one of the exemptions referenced on the form were claimed, or at any time upon request by the department for the purposes of state tax administration. The employer's electronic submission must be made to the department as instructed on Form MW-4.

History: 15-30-2620, MCA; IMP, 15-30-2502, MCA; NEW, Eff. 12/31/72; AMD, 1982 MAR p. 296, Eff. 2/12/82; AMD, 1982 MAR p. 2152, Eff. 12/17/82; AMD, 1986 MAR p. 1835, Eff. 10/31/86; AMD, 1987 MAR p. 1113, Eff. 7/17/87; AMD, 1992 MAR p. 2558, Eff. 11/26/92; AMD, 1998 MAR p. 2504, Eff. 9/11/98; AMD, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2015 MAR p. 27, Eff. 1/16/15, AMD, 2016 MAR p. 1974, Eff. 10/29/16; AMD, 2019 MAR p. 2384, Eff. 12/28/19.