Payroll Tax Withholding

This policy applies to all University employees. 

The University of Nebraska–Lincoln withholds Federal and Nebraska State Taxes by means of the Payroll system.

To ensure compliance with Federal and State tax withholding law and IRS regulation.  

A. W-4 Forms 

1. The University of Nebraska is required to withhold federal and state taxes from certain employee wages, using pre-defined IRS and Nebraska State Income Tax withholding tables. 
2. Each employee must complete W-4 forms when beginning work at the university. If an employee does not complete the W-4 forms, federal and state taxes will be withheld using the single status and no additional withholding or allowances. The university will not refund any taxes that were withheld due to an employee's neglect to complete the W-4 forms. To make changes to your W-4 elections contact your department’s Business Center or the Campus Payroll Office. 
3. To determine the correct number of allowances you should claim on your W-4s, complete the Personal Allowances Worksheet provided by the IRS or State Revenue Department. 
4. A W-4 remains in effect until an employee submits a new one except in the case where an employee claimed to be exempt. An exempt employee must complete a new W-4 each calendar year. See further details regarding exempt status below. 
5. If an employee is to receive an award payment or additional pay i.e. overload pay, summer research, summer teaching it is the responsibility of the department to notify the employee that they may want to change their W-4 withholding status in order to prevent over taxation due to the additional income. 

B. Exemption from Income Tax Withholding 

1. The W-4s for an employee who has indicated that they are exempt from withholding expires on February 15th of each calendar year. If the employee qualifies and wishes to continue being exempt from federal and/or state income tax withholding, the employee must complete a new W-4 and submit it to the Payroll Office 

C. Nebraska State Income Tax 

1. Nebraska follows former federal rules for determining the number of allowances to claim for NE state tax withholding purposes, unless an alternative withholding percentage is required by state law

D. Non-Nebraska State Income Tax

1. University Convenience
   1. Employees working in a state other than Nebraska for the University’s convenience are not subject to State of Nebraska income tax withholding. If the employee resides in a State where University systems are set up to withhold that state’s income taxes, the employee should complete and submit the appropriate state’s W-4 from. If the University is unable to withhold the appropriate state’s income tax, the employee will need to self-report state income taxes for which the state they reside if applicable.   
2. Employee Convenience 
   1. Employees working in a state other than Nebraska at the employee’s convenience are subject to State of Nebraska income tax withholding and must complete a Nebraska W-4.  The employee will also need to self-report state income taxes for which the state they reside if applicable. 

E. Nonresident Aliens 

1. In general, if you pay wages to nonresident aliens, you must withhold income tax (unless exempted by regulations), social security and Medicare taxes as you would for a U. S. citizen. However, income tax withholding from the wages of non-resident aliens is subject to special rules. Please see the instructions for completing the W-4 Forms for a NRA located in Sapphire. 

F. W-2 Tax Forms 

1. By January 31st of each calendar year, the university is required to report to the Internal Revenue Service (IRS) and the State of Nebraska Department of Revenue on a W-2 form for each employee the taxable wages and related compensation, income taxes withheld and certain payroll deduction for the previous calendar year. Wages are always reported for the year in which they are paid. 
2. All University of Nebraska W-2s are either available electronically through the Firefly secured portal or will be mailed to the employee’s permanent home address in the University SAP payroll system prior to January 31st of each calendar year. Electronic or paper distribution is based on employee preference. 
   1. It is the employee’s responsibility to notify their payroll staff of any address change. If an employee has already separated from the University, it is their responsibility to notify the Payroll Office of their permanent mailing address. All separated employees will receive their W2 by mail. 
3. If an employee does not receive their W-2 for wages earned in the previous calendar year by February 10 of each calendar year, they should contact the university City Campus Payroll Office to determine if the W-2 had been returned to the Payroll Office by the U. S. Postal Service. If an employee did not receive their W-2 and it was not returned by the U.S. Postal Service, they may request a duplicate by completing a request for duplicate and providing proof of identification via a picture ID. 

Human Resources, Employee Relations - Questions

402-471-3101, hroffice@unl.edu