Various types of government payments don't require federal income tax withholding even though they may be taxable income. The most common payments of this nature are unemployment compensation and social security benefits. If such benefits are taxable to you based on total income, send in Form W-4V to request voluntary tax withholding instead of making quarterly estimated tax payments.
Instructions
1. Review your sources of income to see if government payments are taxable based on your total income levels. In addition to social security and unemployment payments, government payments include railroad retirement benefits, railroad unemployment insurance, certain crop disaster payments and Commodity Credit Corporation loans.
2. Download Form W-4V from the IRS website and complete the first four lines regarding name, address, social security number and other identification number.
3. Check the block in line 5 if you are requesting tax withholding on unemployment compensation. You can only request 10 percent tax withholding on unemployment compensation.
4. Select one of the tax withholding rates in line 6, depending on your tax bracket, if you are requesting tax withholding on social security or other taxable payments.
5. Submit the signed form to the payer of the government payments to start the withholding. Don't mistakenly send the form to the IRS.
