By Natalie Orozco
Lily Hendlin, a second-year student at UC Santa Cruz, got lucky when her supervisor told her about tax exemptions.
Hendlin works on campus and noticed a major difference in the pay checks she received from her current job and those she used to receive when she worked part time back home.
“When my paycheck comes, nothing’s been taken out,” she said. “Just a couple of dollars for Medicare and stuff, but definitely nothing compared to the taxes I paid before when I worked for an independent contractor.”
According to the Internal Revenue Service’s (IRS) website, if an employee claims exemption from tax withholdings, the employer will not withhold federal income tax from that employee’s paycheck. The exemption, however, only applies to income tax and not to social security or Medicare taxes. If qualified, one can claim exemption by filing a W-4 form.
Hendlin’s supervisor at the Science Library told her about the tax exemption her freshman year, and now as a sophomore she is seeing the effects.
“It just seems so unfair to have money taken out when you don’t even make that much,” Hendlin said.
Jessica Rico, a fourth-year Merrill student, was not aware of the tax exemptions and does not recall filling out a W-4 form when the university first hired her.
“I remember going to the Career Center my sophomore year, but I only remember filling out the employment forms once; and since I’ve worked at the same campus job all three years, I haven’t had to fill out any new employment forms,” Rico said. “But I know I don’t make enough and I always thought it was unfair that they took so many taxes away.”
Pete Norton, the student employment manager at UCSC, explained that the school cannot give tax advice and does not advise tax liabilities either. However, when the university employs a student, the student employee is required to sign payroll forms at the Career Center, where he or she can also learn about filing a W-4 tax withholding form.
“We try to give students the most common options for filling out their W-4 form, but cannot give tax advice,” Norton said. “The information we do provide is from IRS publications. Publication 505 deals with withholdings.”
Students can change their W-4 withholdings at any time by going to:
Students are not automatically exempt. Those who work part time or during the summer may qualify for exemption from withholding.
“FICA [social security and Medicare taxes] is covered under a different policy. Basically, if the student is enrolled full time [six units for undergraduates] and works less than 80 percent time in a month, they will be exempt from FICA taxes,” Norton said.
He also noted that the major problem with tax withholding occurs during the summer when students work full time—then they will have to pay FICA.
According to the IRS website, a citizen may claim exemption from federal income tax withholding if he or she is single and independent and earns up to $8,750 per year. If one is single but claimed as a dependent, the earnings cap is $5,350 a year, providing that less than $300 of that amount is unearned income (i.e. interest).
_If you feel you may qualify to exempt from taxes, log on to the IRS website and read Publication 505, the guideline that the Student Employment Office at UCSC refers to for policies: _