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I am talking about this area of the United States W4 Form:

"(c) Extra withholding. Enter any additional tax you want withheld each pay period: "

I have sold some properties in 2020 and I want extra federal withholdings to help cover my capitol gains. I changed my W4 to add $300 per pay check in this box (c) of the W4. My first pay check since making the change has EXACTLY $300 withheld instead of adding $300 to my normal withholding.

Is this correct, or is this a mistake on behalf of how my company is running payroll? I would have expected my regular federal withholding (let's say it was $100) to be added, so it would be $400 in this example.

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  • "My first pay check has EXACTLY $300 withheld instead of adding $300 to my normal withholding" Is this the first check with a new company? or is it with a company you have been with for months? Oct 31 '20 at 13:07
  • Sorry... That's confusingly worded. I have been with this company just shy of a year. First paycheck since changes.
    – maplemale
    Oct 31 '20 at 15:38
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Your expectation is correct, if your regular withholding is $100 then the new total should be $400. The description of (c) is pretty self-explanatory.

Contact payroll and at least make sure they fix it for the next paycheck. Unless your regular withholding is way more than $300 (like > $1,000) you shouldn't need to do anything else and it will be worked out by tax time next year.

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    My payroll department is inept. We use ADP. They claim "ADP figures it out and it's correct no matter what", I'm wrong. They literally refuse to do anything. PS: This is a billion dollar company. Led by the nose of the software I guess.
    – maplemale
    Nov 5 '20 at 16:11
  • @maplemale A previous employer of mine used ADP as well and they screwed up several people's pay when they took PTO. Payroll is either inept (like you said) or lazy. Can you escalate this to your supervisor?
    – Nosjack
    Nov 5 '20 at 19:02
  • So, it turns out we use ADP but, the calculations are done in WorkDay. I'm using a portal that is literally a WorkDay web page.
    – maplemale
    Nov 6 '20 at 22:21
  • I do have a high dependent claim number, could this have some affect? So, I claim 4 children and my spouse as a dependent. Still seems like the wording on the W4 is quite explicit "Extra" withholdings.
    – maplemale
    Nov 6 '20 at 22:22
  • @maplemale The number of dependents should only affect your "base" withholding. Assuming your base withholding ("X") is greater than zero, your final withholding with the "extra" should be $300 + X. Also, as far as I know there is never a situation where your spouse qualifies as a dependent, so you may want to change that.
    – Nosjack
    Nov 9 '20 at 14:47

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