NoSSN - 26 CFR 31.34029(p)

26 CFR 31.34029(p)
Voluntary Withholding Agreements
January 1, 2002

[Code of Federal Regulations]
[Title 26, Volume 14]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR31.3402(p)-1]

[Page 249-250]

TITLE 26--INTERNAL REVENUE

CHAPTER I--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY--
(Continued)

PART 31--EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE--Table of Contents

Subpart E--Collection of Income Tax at Source

Sec. 31.3402(p)-1 Voluntary withholding agreements.

(a) In general. An employee and his employer may enter into an
agreement under section 3402(b) to provide for the withholding of income
tax upon payments of amounts described in paragraph (b)(1) of
Sec. 31.3401(a)-3, made after December 31, 1970. An agreement may be
entered into under this section only with respect to amounts which are
includible in the gross income of the employee under section 61, and
must be applicable to all such amounts paid by the employer to the
employee. The amount to be withheld pursuant to an agreement under
section 3402(p) shall be determined under the rules contained in section
3402 and the regulations thereunder. See Sec. 31.3405(c)-1, Q&A-3
concerning agreements to have more than 20-percent Federal income tax
withheld from eligible rollover distributions within the meaning of
section 402.
(b) Form and duration of agreement. (1)(i) Except as provided in
subdivision (ii) of this subparagraph, an employee

[[Page 250]]

who desires to enter into an agreement under section 3402(p) shall
furnish his employer with Form W-4 (withholding exemption certificate)
executed in accordance with the provisions of section 3402(f) and the
regulations thereunder. The furnishing of such Form W-4 shall constitute
a request for withholding.
(ii) In the case of an employee who desires to enter into an
agreement under section 3402(p) with his employer, if the employee
performs services (in addition to those to be the subject of the
agreement) the remuneration for which is subject to mandatory income tax
withholding by such employer, or if the employee wishes to specify that
the agreement terminate on a specific date, the employee shall furnish
the employer with a request for withholding which shall be signed by the
employee, and shall contain--
(a) The name, address, and social security number of the employee
making the request,
(b) The name and address of the employer,
(c) A statement that the employee desires withholding of Federal
income tax, and applicable, of qualified State individual income tax
(see paragraph (d)(3)(i) of Sec. 301.6361-1 of this chapter (Regulations
on Procedures and Administration)), and
(d) If the employee desires that the agreement terminate on a
specific date, the date of termination of the agreement.

If accepted by the employer as provided in subdivision (iii) of this
subparagraph, the request shall be attached to, and constitute part of,
the employee's Form W-4. An employee who furnishes his employer a
request for withholding under this subdivision shall also furnish such
employer with Form W-4 if such employee does not already have a Form W-4
in effect with such employer.
(iii) No request for withholding under section 3402(p) shall be
effective as an agreement between an employer and an employee until the
employer accepts the request by commencing to withhold from the amounts
with respect to which the request was made.
(2) An agreement under section 3402 (p) shall be effective for such
period as the employer and employee mutually agree upon. However, either
the employer or the employee may terminate the agreement prior to the
end of such period by furnishing a signed written notice to the other.
Unless the employer and employee agree to an earlier termination date,
the notice shall be effective with respect to the first payment of an
amount in respect of which the agreement is in effect which is made on
or after the first ``status determination date'' (January 1, May 1, July
1, and October 1 of each year) that occurs at least 30 days after the
date on which the notice is furnished. If the employee executes a new
Form W-4, the request upon which an agreement under section 3402 (p) is
based shall be attached to, and constitute a part of, such new Form W-4.

(86 Stat. 944, 26 U.S.C. 6364; 68A Stat. 917, 26 U.S.C. 7805)

[T.D. 7096, 36 FR 5216, Mar. 18, 1971, as amended by T.D. 7577, 43 FR
59359, Dec. 20, 1978; T.D. 8619, 60 FR 49215, Sept. 22, 1995]

"I have never been able to conceive how any rational being could propose happiness to himself from the exercise of power over others." --
Thomas Jefferson to A. L. C. Destutt de Tracy, 1811

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