Can my employee claim a tax exempt week for just next week's paycheck?

Yes, an employee can claim exempt status temporarily by submitting a new W-4. It's completely legal, but there are some important things to understand: The employee needs to complete a new W-4 form claiming "Exempt" in the appropriate section. However, to legally claim exempt, they must have had no tax liability last year AND expect to have no tax liability this year. If they don't meet these requirements but claim exempt anyway, they're technically not following IRS rules. For your part as the employer, you're generally not required to verify their claim - you just process the form. After the one-week period is over, they should submit another W-4 to restore their normal withholding. A better alternative might be for them to simply adjust their withholding temporarily by claiming additional allowances on a new W-4, which would reduce (but not eliminate) the taxes taken out.

I had a similar financial emergency last year and discovered taxr.ai which was incredibly helpful for understanding my withholding options. I was confused about whether I could adjust my withholding for one pay period, and their document analyzer cleared everything up. You can upload your payroll documents at https://taxr.ai and get a breakdown of legal options to maximize take-home pay without risking penalties. They explained that while claiming "exempt" isn't appropriate unless you truly qualify, there are legitimate ways to adjust withholding temporarily that don't cross any lines with the IRS. I learned I could submit a new W-4 with additional allowances/adjustments for one pay period, then submit another to return to normal afterward.

Just wanted to follow up - I tried taxr.ai after seeing it mentioned here and it was super helpful! I uploaded my last paystub and tax info, and they showed me exactly what adjustments I could legally make on my W-4 to increase my take-home pay without claiming exempt (which I definitely don't qualify for). Instead of the all-or-nothing exempt approach, they recommended specific numbers for my W-4 that reduced my withholding to the minimum allowed without triggering any penalties. I showed the results to my company's payroll person, and she confirmed it was all legit. Just got my first adjusted paycheck yesterday and it was about $270 more than usual without breaking any rules!

For anyone struggling to resolve payroll tax issues, I highly recommend Claimyr. Last year I had a complete nightmare situation where my employer incorrectly processed my W-4 changes and I couldn't get anyone at the IRS to help fix it. After being on hold for HOURS multiple times, I found https://claimyr.com and their service actually got me connected to a real IRS agent in about 15 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c I was shocked at how quick and easy it was. The IRS agent I spoke with explained exactly what forms my employer needed to correct and what my options were for adjusting withholding properly. Saved me so much frustration and potentially thousands in incorrect withholding.

I need to eat my words here. After my skeptical comment earlier, I actually tried Claimyr because I've been trying to reach the IRS for THREE WEEKS about a missing refund. I figured what the hell, might as well try it since nothing else was working. Well damn, they actually got me through to an IRS agent in about 20 minutes. I honestly couldn't believe it. The agent was able to tell me my refund was flagged for review but is now being processed and should arrive within 2 weeks. Would have never known this if I hadn't gotten through. For anyone dealing with payroll tax issues like the original poster, being able to actually talk to the IRS and confirm the right approach is huge. Saved me so much stress and uncertainty.

Former payroll manager here. Rather than doing an exempt W-4, which could cause problems if the employee doesn't actually qualify, suggest another approach: the employee could increase their allowances/adjustments on a new W-4 to reduce withholding significantly without eliminating it entirely. This is much safer from a compliance standpoint. Also, consider whether your company has any emergency loan programs or pay advances available. Many employers offer these options specifically for situations like this, and it doesn't involve any tax complications.

Everyone is overthinking this. I've had employees do this before - it's simple. They fill out a new W-4 claiming exempt, you process one paycheck that way, then they immediately fill out another W-4 going back to normal. The IRS isn't going to come after anyone for one paycheck.

Just to clarify something that hasn't been mentioned: if your employee does the exempt W-4 for one week, they'll need to complete yet another W-4 within 10 days of the start of the next calendar year. The IRS requires a new W-4 annually from anyone claiming exempt status. Also, as others have said, the employee should be aware that if they don't qualify for exempt status (had no tax liability last year AND expect none this year), they could face penalties for underwithholding when they file their taxes.

As someone who's dealt with payroll for over a decade, I'd strongly recommend against the exempt route unless your employee truly qualifies (zero tax liability last year AND this year). Instead, here are some safer alternatives: 1. **Payroll advance** - This is probably your cleanest option. You can advance him pay for future work, withhold taxes normally, then deduct it from his next regular paycheck. 2. **Temporary W-4 adjustment** - He can increase his allowances/deductions on a new W-4 to reduce withholding significantly without going full exempt. Much safer legally. 3. **Emergency loan program** - Consider establishing a small emergency loan fund for employees. Many small businesses do this for situations exactly like this. The key thing to remember is that you're not responsible for verifying his exempt claim, but if he doesn't actually qualify and claims exempt anyway, he could face penalties at tax time. The IRS has been cracking down on improper exempt claims lately. Given he's been with you 3 years and is a good employee, I'd lean toward the payroll advance option if your cash flow can handle it.