Question

Which of the following items is not correct regarding withholding?

1) Employees that also have self employment income can have additional amounts withheld to avoid estimated tax payments.
2) Employees cannot claim an allowance for a child unless they are entitled to claim the child as a dependent.
3) Employees can claim exempt and avoid withholding.
4) Married employees can choose to be withheld at the higher single rates.

Answer 1

Employees cannot claim exempt and avoid withholding.

Step-by-step explanation:

The incorrect item regarding withholding is number 3) Employees can claim exempt and avoid withholding.

Employees cannot claim exempt and avoid withholding. The option to claim exempt is intended for individuals who had no tax liability in the previous year and expect to have no tax liability in the current year. They must meet certain criteria to qualify for exempt status, such as having no tax liability for the previous year and anticipating no tax liability for the current year.