While some employees legitimately need to adjust withholding occasionally, others are convinced that they can “work the system” and change tax withholdings frequently throughout the year. Sometimes it’s not convenient or simple for the payroll staff to make these master file changes to tax status codes, and the repeat offenders will probably find their names on the “Naughty List” before too long.
Unfortunately for the payroll team, there are no tax regulations that limit the number of times that an employee can change his or her W-4. However, in an effort to make the process less attractive, you can take the longest time possible to implement a W-4 change into your payroll master file. The law requires that you must put the change into effect the next payday that is within 30 days from the date that the employee submitted the new Form W-4. This may help deter this practice for those certain employees!