Radford University is required by law to withhold certain mandatory deductions from employee pay. These include:
- Federal Income Taxes
- Social Security & Medicare taxes - also known as FICA
- Additional Medicare Tax for high wage earners
- State Income Taxes
- Locality Taxes including city or county taxes, disability or unemployment insurance
- Court ordered garnishments or child support payments
In addition, full time employees have required contributions to retirement plans deducted from their pay. Participation in one of the available retirement plans is a condition of employment.
Full time state employees receive a life insurance benefit of 2 times their annual salary with the premiums paid by the university. Life insurance is a tax-free benefit up to $50,000. The IRS requires employees to pay taxes on the value of any amount of life insurance paid by the university exceeding $50,000. FICA taxes are withheld on this imputed income.
Voluntary payroll deductions cannot be withheld from an employee’s pay check unless the employee authorizes deduction though an agreement. Examples include:
- Health insurance premiums
- Contributions to a 403(b) or 457 plan
- Optional Life insurance premiums
- Contributions to a flexible spending account
- Long Term Disability – Income Protection Plans
- Prepaid Legal Services
- Parking permit fees
- Certain charitable giving
The IRS Form W-4 is completed by the employee to let the Payroll Office know how much to withhold from the employee’s paycheck for federal taxes. Accurately completing the W-4 can help prevent owing additional taxes on annual income tax filing. It can also prevent overpaying taxes throughout the year.
If you have questions about submitting the tax form, please call the Payroll Office at x7610. Inaccurate information on a tax form can void it entirely. While Payroll can help with understanding the form, Payroll employees are not authorized to offer tax advice. If advice is needed, please consult with a Tax Accountant. Additional resource materials can also be found on the IRS website.
The Form W-4 2020 Presentation located on the Training Catalog -Controller's Office page within D2L provides detailed information on how to complete the form.
Supplemental Tax: Certain employee earnings like bonuses, are subject to supplemental tax withholdings. Generally, though not always, the tax amount withheld will be approximately 35.4 percent of the total taxable income. This is based on the following rates:
- 22.0 percent for Federal Income Taxes
- 5.75 percent for State Income Taxes
- 7.65 percent for FICA
Exemption: Not everyone can claim exemption from federal income tax withholding. Employees must meet specific qualifications to be exempt. Employees can claim exemption if both of the following situations apply:
- In the previous year, the employee had the right to a refund of ALL federal income tax withheld from their wages because they had no tax liability.
- In the current year, the employee expects a refund of ALL federal income tax withheld because they plan to have no tax liability.
There are also some other factors that help decide if an employee can be exempt from federal income taxes. For help determining if you are exempt from taxes, refer to IRS Publication 505.
Those employees who claim exempt must submit a new Form W-4 by February 15 each year if they wish to claim exempt for the current tax year. If the employee does not submit a new form by that date, Payroll will withhold at the single filing status with no allowances.
To qualify for an exemption on the Virginia state tax form (VA-4), you must meet the criteria outlined in the instructions on the VA-4 form. A new VA-4 must be filed with the payroll department for each year you wish to claim exemption from Virginia withholding as they expire on December 31. FICA exemption: Student employees are exempt from FICA taxes if they are enrolled on at least a half-time basis with the University. This exemption applies to work study/scholarship and wage employees, as well as Graduate Assistants. To get the exemption, the student employee must not have another job on campus that is considered a “career position”. F-1 visa students receiving compensation from on-campus employment also receive the FICA exemption. The FICA exemption policy provides additional information..
Taxable Fringe Benefits
Some benefits provided to employees are not paid in cash but are taxable income to the employee. Taxable fringe benefits include, but are not limited to:
- Weight Watchers
- Housing Allowance
- Educational Assistance (when it exceeds $5,250.00 per calendar year)
- Certain Membership Dues
- Retention and Recruitment Incentives
- Reimbursement of Day Meals
Last Updated: 8/11/2021