What effect does an employees W-4 form have?
The status and number of allowances claimed on a W4 doesn’t change the actual tax liability of the employee, just the amount withheld from each paycheck — the more allowances, the less is withheld. If the employee claims too many allowances, he or she will owe money at the end of the year. Also, the employer does not have to submit the W-4 information to IRS unless an employee claims 10 or more allowances — then that employee’s W-4 should be sent to the IRS along with the next quarterly 941 form.
