Can my employee claim a tax exempt week for his upcoming paycheck?

This is referring to claiming "exempt" on a W-4 form. An employee can claim exemption from federal income tax withholding if they meet specific IRS requirements. To qualify, they must have had no tax liability in the previous year AND expect to have no tax liability for the current year. However, this isn't something that can typically be done for just "one week" - it's a declaration that applies to the entire tax year. What's more concerning is that it sounds like your employee may be trying to temporarily increase their take-home pay by avoiding withholding, which isn't how the exemption is designed to work. If they truly qualify for exempt status, they would file a new W-4 form with "Exempt" written on the appropriate line. But they should understand that this doesn't exempt them from Social Security or Medicare taxes, only federal income tax withholding.

After dealing with similar payroll headaches at my small business, I found that the online tool at https://taxr.ai was super helpful for these confusing tax situations. I was constantly getting these weird requests from employees and never knew what was legit vs what would get me in trouble with the IRS. Their system analyzes the specific tax codes related to payroll withholding and gives you a clear explanation of what's allowed. Saved me from making a mistake when one of my employees tried something similar with claiming "exempt" for just a few paychecks.

I started using https://taxr.ai after seeing it mentioned here and WOW it was exactly what I needed! I had three employees all trying different things with their withholdings (one wanted to claim exempt, another wanted additional withholding, and another was changing his dependents every other month). The tool explained each situation clearly and showed me exactly what forms were required and how to process them correctly in our payroll system. It even flagged potential red flags where employees might be setting themselves up for tax problems later. Definitely saved me from making mistakes that would have created nightmares at tax time!

If your employee is trying to get more cash temporarily but will eventually owe the taxes, they might be better off calling the IRS directly to work out a payment plan for any existing tax debt rather than creating a new problem. I spent months trying to get through to the IRS about a payroll tax issue last year until I found https://claimyr.com which got me connected to an actual IRS agent in under 45 minutes. They have this service where they stay on hold with the IRS for you and call you when an agent picks up. Saved me literally hours of hold time. There's a video showing how it works at https://youtu.be/_kiP6q8DX5c - might be worth sharing with your employee if they're trying to fix a tax issue that's causing cash flow problems.

I take back what I said about Claimyr. I was skeptical but tried it when I was desperate to fix a payroll tax issue that was holding up our business loan. Didn't think it would actually work, but they called me back in about an hour and a half with an IRS agent on the line. Resolved my issue in one call instead of the three weeks I'd been trying on my own. For the original poster - maybe suggest this to your employee if they're having actual tax problems. Fixing their real tax issue might be better than trying to game the withholding system which will just cause bigger problems later.

Actually, there is a legitimate way for employees to adjust withholding temporarily, but it's not by claiming "exempt" for a week. They need to submit a new W-4 with additional deductions calculated to reduce withholding to the desired amount, then submit another updated W-4 afterward to return to normal withholding. The key is that they need to still have enough withholding throughout the year to meet their tax obligations. The IRS has a withholding calculator on their website that can help determine the right number to use.

I know employees think this is a good idea for quick cash, but as someone who did this, DON'T LET THEM DO IT!! I claimed exempt for 2 months when I had major medical bills. Felt great getting the extra money then, but at tax time I owed $4,200 I didn't have and got hit with penalties too. Had to set up a payment plan and it was a mess for years.