It is commonly thought that if you are a student, then you are exempt from federal income tax withholding. This is not necessarily the case. High School and College students must meet the same criteria as all other U.S. Citizens to be considered exempt from federal income tax withholding. Regardless if you are a student or not, you are not exempt from federal income tax withholding if:
- Your annual income is greater than $950 including over $300 of unearned income such as dividends and interest, and
- Another person is claiming you as a dependent.
It is common for students to claim “exempt” on Form W-4 (PDF), Employee’s Withholding Allowance Certificate. For this to be acceptable, you normally would have to have had no tax liability in the prior year and expect no withholding for the current year (see above). An exemption certificate is good for the calendar year. If you are unsure of your federal income tax withholding requirements, please visit Tax Information for Students for more information.