Can I File Exempt & Still Get a Tax Refund?

Tax Refunds, Taxes 101 Two Businessmen Coworking

The IRS issues tax refunds when you pay more tax during the year than you actually owe. When you file exempt with your employer for federal tax withholding, you do not make any tax payments during the year. Without paying tax, you do not qualify for a tax refund unless you qualify to claim a refundable tax credit, like the Earned Income Tax Credit.

The tax law requires your employer to withhold federal income tax from each paycheck you receive and send it to the IRS on a quarterly basis. At tax time, your employer provides you with a W-2 Form that reports the total amount of taxes withheld during the year. When you sit down to do your taxes, if your tax liability is less than the total amount withheld, the IRS will send you a tax refund for the difference.

Generally, if you are self-employed and expect to owe $1,000 or more, you are required to make income tax payments every three months throughout the year.

Filing exempt from withholding

When you start a job, your employer will ask you to fill out IRS Form W-4. The W-4 estimates your personal allowances so you can tell your employer the amount that should be withheld from each paycheck based on the tax information you provide. To claim an exemption from withholding, you must meet certain criteria. If you had even $1 of tax liability in the prior year or anticipate earning income in excess of the sum of your standard deduction, you cannot be exempt from federal tax withholding in the current year.

For example, if you file as single on your 2018 taxes, you must not anticipate earning income in excess of the new standard deduction $12,000. If you still claimed exempt from withholding and earn income in excess of this amount, you will probably have some tax liability unless you qualify for refundable tax credits like the Earned Income Tax Credit or the Child Tax Credit.

Claiming allowances on the W-4

If you are unable to claim exempt from withholding, you can still reduce the amount that is withheld from each paycheck by claiming allowances on your W-4. The more deductions you anticipate claiming at the end of the year, the more allowances you can take. These allowances are based on your filing status, the itemized deductions you anticipate claiming such as mortgage interest, state property taxes and medical expenses. The TurboTax W-4 withholding calculator can easily help you figure out your withholding allowances.

Refundable tax credits

A refundable tax credit means that even if you have zero tax liability before claiming the tax credit, you may still get a tax refund. Refundable tax credits not only reduce federal taxes you owe, but they also could result in a tax refund even if the tax credit is more than the tax you owe. For example, the American Opportunity Tax Credit that covers certain higher education expenses is 40 percent refundable and the Earned Income Tax Credit is fully refundable so if you are eligible for these tax credits you may see a tax refund even if you paid no income tax for the year.

Don’t worry about figuring any of this out. TurboTax will ask you simple questions and give you the tax deductions and credits you are eligible for based on your answers. If you still have questions, you can connect live via one-way video to a TurboTax Live CPA or Enrolled Agent and get your tax questions answered from the comfort of your couch. A TurboTax Live tax expert can even review, sign, and file your tax return.

Comments (188) Leave your comment

  1. I worked two jobs last year, one I had taxes taken out, and the other one I fiiled exempt. On the exempt job I only made $1,934, and the job I had taxes taken out of I made $7,023. So do I need to claim my exempted income on my tax returns this year or can I leave them out?

    1. Hi Felicia,
      You typically would have to claim income from both jobs, however your income is less than the income requirements for filing. Although your income is less, you may still get a refund if you had taxes taken out and additionally if you are entitled to credits like earned income tax credit.
      Thank you,
      Lisa Greene-Lewis

  2. I worked two jobs last year and one of my w-2 forms came in that said 0 on my federal withheld! I have no idea why. The first job I had in the year 2012 was for 3 months and they took out for my federal I made 4,000 dollars there for gross income! After I left there I got another job and worked there for the last 7 months of the year though December and made a gross income of 10,000! I have one dependent and my w-2 from there said 0 was taken out for federal withheld! I’m worried I’ll have to pay back taxes! What should I do and what options do I have?

  3. Hi Lisa Im married and we filed married. But for 2012 I forgot to change my w4 back to normal from exempt. i was exempt for 9 months, will we end up oweing? We have three kids under 18. And my wife also enrolled into school. Thank you

  4. I have a question. I filed exempt on my 2012 W4 for a job I did in Texas. Made about 26600 in about 2 months. Work the rest of the year in my home state Florida, had taxes taken out in Florida. I have added all up and made about 65000 total last year. I am filing jointly this year on 1098. After adding everything up and the deductions. We end up paying 75.00 in this year. I took the advice from a friend and I shouldn’t have for filing exempt. Now I am worried that the IRS is going to fine me a good bit. What penalties do you think I will have to pay and would they come after me hard. I am really worried.

    1. Hi Paris,
      Yes, you may get money back if you had federal taxes withheld. Especially if you take advantage of other tax credits and deductions. TurboTax walks you through the appropriate questions so that you can take the tax deductions and credits you deserve.
      Also remember if you have questions, you can ask our tax experts your question via chat or in person.
      Thank you,
      Lisa Greene-Lewis

  5. Im filed my taxes and apparently i owe which is surprsing to me. I filed exempt and have 0 withholdings on my w-4 and i do not have any dependents. what am i doing wrong that would make me owe money at the end of the year? I am single and dont qualify for head of household or eitc.

    1. J Ware… When you file form W-4 with your employer as “exempt”, you are telling your employer not to withhold any federal taxes. That is why you owe money at tax time. You should have taxes withheld from each paycheck so you don’t face tax time owing Uncle Sam.

      Bob Meighan, VP TurboTax

  6. I worked May – Dec, claiming 9 and married during this period. My W2 now states I have paid 0 into Federal Taxes. Is this correct? Shouldnt I have been paying at least a small amount each paycheck?

    1. Sarah… Withholding is done by your employer. It is conceivable that by claiming 9 exemptions there was no tax withholding. Correct or not depends on how much income you expected to earn for the year. If your joint income is more than around $18,000 you should have income tax withheld from each paycheck.

      If you need to change your withholding allowances to have more or less taken out, file Form W-4 with your employer. TurboTax will help you complete this form, but I encourage you to file your return first. That’s because you can use your 2012 tax return information to more accurately determine what should be claimed on Form W-4.

      I hope this info helps!
      Bob Meighan, VP TurboTax

  7. Hi! The education tax credits are “nonrefundable,” which means they won’t increase your refund if you owe no tax to begin with. Hope that clarifies! –Christopher

    1. Hi! The education tax credits are “nonrefundable,” which means they won’t increase your refund if you owe no tax to begin with. Hope that clarifies! –Christopher

    2. Aniya… Just a correction to what TurboTaxChristopherT said. 40% of the American Opportunity Credit is refundable, which means you can get a refund even if you owe no tax. So, don’t overlook this credit!! It’s YOUR money! And by the way, it’s very challenging keeping up with the tax laws and that’s why TurboTax is so valuable. TurboTax does all the calculations so we don’t need to know all the minute details.

      Bob Meighan, VP TurboTax

  8. I work two jobs, one of which is a work study at the college where i attend full time and the other is a part time job at a clinic. My work study i put exempt so nothing has been taken out and my other one i had taxes with held. will i get a return?

  9. Hi Barb,

    I filled exempt once I started my new job in June, 2012 (since I did that during my last job which lasted 2 yrs) But changed it to non exempt beginning Jan 2013. For the 6 months at my new job ( June 2012- – Dec 2012) I paid no Fed taxes. Will I owed the IRS money this year or next?

  10. Hello Barb,
    I have 3 W2’s from 2012 and when I do my TurboTax filing online, I have a good amount coming back to me but when I enter my W2 from an employer who did not take taxes out due to not making enough, my refund drops about 1500.00 and I am still waiting on my 3rd W2. I want to know, since Federal Taxes were not taken out from the one employer, can I file this W2 next year. I’m in a bind and need as much as I can get right now.

    1. Leah… I think we’d all like to defer reporting out wage income to another year, but unfortunately, that is not the way our tax system works. You’ll have to report exactly what you receive on each W-2. In the future, you should file Form W-4 with each employer to ensure you have the proper taxes withheld from your paycheck. This will prevent unpleasant surprises at tax time.

      Bob Meighan, VP TurboTax

  11. I’m a single mom of 4 dependents and earned $10,000 but my tax with held for the whole year was only $1 will I get anything back??

    Thank you Crystal

  12. Hi Lisa! I worked for a month and only made 1400.00. I started school last May as a full-time student. I’m wondering should I file taxes or let my boyfriend claim me as a dependant. I don’t want to mess up my fasfa or his money. Which way should I go?

  13. I work as a Nanny and just got my W2 from a family i worked for last year. I noticed that the boxes in Fed & State tax were empty. Does this mean that they didn’t pay any taxes for me? Is this even legal? I am shocked that I didn’t even know. I would have paid them quarterly if I had known.

  14. Hi I didn’t file last year so I’m doing 2011 and 2012 together I filled exempt both years due to bills. I make 17,000 a year will I owe the IRS. I still have some taxes coming out about 60 dollars every two weeks 10.50 a hour for an 80 hour pay period

  15. Hi Lily-

    The rules for claiming a non-related person as a dependent are as follows:
    -He must be a U.S. citizen and unmarried.
    -He must have lived with you all year.
    -His gross income must be less than $3,800
    -You must have provided more than half his support for the year.

    If you met all those requirements (and it sounds as if you may), you can claim him as a dependent. To do this in Turbo Tax, go to the Personal Information section. When it asks if you support anyone else, indicate that you do. It will ask if it is your child or someone else. Select ‘someone else’, and it will take you through the process of adding him as your dependent.
    Thanks!
    Barb

  16. Hey Lisa, I have a question me & my fiance live together( we have all year) he didn’t work all year and I have an earned income of 24,000 yet I owe Unemployment from the prior year. My question is since I pay for his medical, rent, food, clothing Etc.. Can I technically claim his as a dependent?

  17. ok i worked all year except in the summer when i received unemployment for two months and i didnt allow them to take out taxes of that money will that mess up my tax return?

  18. Hi Lisa,

    I’m freaking out because I just realized I claimed 9 on my W-4 when I started my job in Febuary.I have 2 young kids and made $22292.00 this year.From what I can see on my Paystub I dont see any federal withholding being taking out.All the Tax calculators say that I will get a rather large refund back.Is this possible if I had no federal withholding?

  19. Hello Lisa,my name is Barbara.I filed exempt all year on the advice of a co-worker who says she has filed exempt for years and since she has 3 children, has always still got a decent tax refund. Me being a struggling single parent,am still leary. Could you explain to me if she is telling the truth? I mean basically if filing exempt all year would affect mi eitc. I have 2 kids.

  20. Hi Lisa

    I exempted for only 9 months have 2 kids, and making 10/hr. Am I still eligible for EIC & child tax credit? Thanks 🙂

    1. Hi Tammy,
      It is possible that you are still eligible since EITC is a refundable tax credit and the child tax credit is partially refundable. Refundable tax credits can still qualify you for a credit even if you did not pay in taxes. I am not sure what your total income is and both credits do have income limitations, but please take a look at
      http://blog.turbotax.intuit.com/2012/01/30/what-is-the-earned-income-tax-credit-2/ and
      http://blog.turbotax.intuit.com/2011/12/13/a-guide-to-child-tax-benefits/ for information on income limitations and age requirements for dependents.
      Thank you,
      Lisa Greene-Lewis

  21. To catch up on some bills, someone told me we could claim Exempt for 5 weeks a year and still get a tax refund (not owe). We also have a 3 year old, so we get that credit. Just wanted to see if 5 weeks is the cut off, or if we can go a couple more weeks.

    1. Hi Melissa,
      There is no cut off for the amount of time you can claim 5 exemptions. It all depends on your tax situation(how much income your earn and how much deductions you are eligible for). There are requirements for claiming full exemption where you don’t have any taxes taken out of your checks. This doesn’t sound like the case for you.
      You can use our W-4 salary calculator to help you estimate your exemptions. Here is the link
      http://turbotax.intuit.com/tax-tools/
      Thank you,
      Lisa Greene-Lewis
      http://blog.turbotax.intuit.com

  22. Hey Lisa

    I worked for 6 months as an intern in US. I received my W2 form in Feb 2012. Unfortunately since I was travelling, I forgot about the form. Is it possible I can claim my tax refund. Could you please help as how I should proceed.

    Thanks
    Prabu

  23. Hey Lisa I hope your still checking this, I have a ? about filing exempt. I can only work part time about $8000 for the year, and also get food stamps (about $2400 for the year) Last year i made around $7500. Should i be filing exempt or even filing at all? Every little bit helps and if I can not have taxes held out that would be great. Thanks. Oh also im 31, single with no kids.

    1. Hi Jason,
      You should be able to file exempt. In addition, you should still file your taxes, because you may be entitled to various refundable tax credits like the Earned Income Tax Credit, which can give you a credit even if you didn’t have any taxes due.
      TurboTax will help you get your tax refund when you file your taxes.
      Thank you,
      Lisa Greene-Lewis

  24. I work full time and earn commission. The way my employer has set up the earning codes for my commission wages results in me being taxed over 40% on commissions. My regular wages are taxed at 22.5%.
    When I used TurboTax this past April to file taxes, there was no way to me to distinguish differences in earnings types, or indicate that I have grossly overpaid on my commission earnings. My tax return was almost non-existent.
    Is there a way for me to file my W4 such that I do not pay taxes on going, instead pay lump sum at the end of the year? Since I cannot make a distinction between earning types, the taxes at the end of the year should be calculated based on my true net earnings, and thus be more accurate.
    Please let me know how this can be accomplished. Thank you

  25. I earn 12.00 an hour and work about 23 hours a week, I am also a full time student with a child. I claim 3 exemptions on my payroll and no federal taxes have been coming out, my worry is will I owe money at the end of the year and will I still be able to get my earned income credit?

  26. Hi I am a full time college student and my parents still claim me also. I will make about 4,000 this summer from an Internship and in the fall and spring I will have workstudy that’s would be up to 1,500. I am not sure of what to put on my w-4 for this summer it was at default on 1 but I changed it to 0 because to many taxes were taken out. What should I do to be safe ?

  27. If I did a tax exemption for a couple of weeks in the year, is this supposed to just come out of my refund? (I was under this impression.) Randomly, I was taxed a few paychecks later and almost 3/4 of my paycheck was taken. Isn’t it supposed to deduct from my refund when I file rather than tax me extra at a later date without being notified?

  28. I have a question i claimed head of household and also 3 on my w-2 form. I do not pay into federal taxes at the end of the year since i only make 9.00 a hour every week getting paid will i still have to owe the IRS? And can i still get a refund for my children?

  29. Hi, I started a new job on 5/21/2012 and my federal exempt is 10 and on my first pay check no federal tax were taken out. What does that mean? Can that hurt me or will I have to pay the IRS or not get a refund. Personally I rather not get a refund than pay the IRS. I have 3 dependents my unempled spouse, and 2 children under 18. Should I change my w4?

    1. Hi Josi,
      If you do not have taxes taken out you may have to pay the IRS, but without knowing all of your tax deductions and your income it is hard to say. Some people have enough deductions that they don’t owe even if they did not take out federal taxes. You can use our W-4 salary calculator to help you figure out the correct amount of exemptions for 2012. Here is the link http://turbotax.intuit.com/tax-tools/
      It is not updated for 2012 yet, but it can still assist you in estimating.

      Thank you,
      Lisa Greene-Lewis

      1. Recent news stories make it clear that there are agirluctural tax advantages in Florida, but the land must be used agirlucturally. Talk to your county assessors and state tax offices.

  30. i am paying back taxes to the IRS for taxes owed 2009. can i still file exempt w/my employer or is this a tax liability

  31. my two daughters are going to college full time. they work in the summer full time and make about $3500 – 4000 . In the school year they work at college and make about $1500. We claim them as dependents. What should they claim on their W2 form as exeptions? They want to get as much money as they can from their pay checks. But at the same time do not want to owe taxes at the end the year. What should they claim a 2 or 3 as exepctions?

    1. Hi Berneita,
      You were asking what your daughters should claim on their W2s, but I think you are referring to the W4. Your daughters need to notify their employers how many exemptions they want to take on their W4 forms by filling out and giving them W4 forms. Claiming 2 or 3 is probably safe, but without seeing the entire financial picture I can not tell you what they should claim. They can use our W4 Salary Calculator that will help them figure out how many exemptions they should claim based on their income and how much taxes they have had taken out. The W4 Salary Calculator is not updated for 2012, but can still be used to help them http://turbotax.intuit.com/tax-tools/calculators/w4/index.jsp After using the salary calculator, they should fill out the W4 form with the exemption amount and give it to their employer.
      Thank you,
      Lisa Lewis
      http://blog.turbotax.intuit.com

  32. question can a employer force u to file dependants on w2, my current employer stated i can not file EXEMPT, who is an employer to tell me how i should file?? he stated if i file EXEMPT, he then would be liable to pay my taxes that should of been taken out, i have been filing EXEMPT for years now, this is the 1st employer that has ever given me such grief over filing EXEMPT, so my question would be , would the employer be liable for the way i file EXEMPT???

    Thank you

    Jim

    1. Hi Jim,
      To qualify for exemption, you must not have had any tax liability the previous year and you cannot expect to have any in the current year.
      If you can be claimed as a dependent on someone elses tax return there may be other restrictions. If you do not meet these qualifications the IRS may send you what is called a “Lock-In Letter”, which tells you how many exemptions you have to claim. If you received this type of letter from the IRS, then this would be the situation where they would have to follow the Lock-In Letter.
      Please see IRS topic 753 for more information http://www.irs.gov/taxtopics/tc753.html
      Thank you,
      Lisa Greene-Lewis

  33. I have a question, i wanna file exempt with my current employer, but my employer is stating i can not do this because he will be liable for paying my withholding taxes. i know he is wrong, i’ve been doing this for 15 years now, is there some type of info out there showing the employer is not responsible my my withholding and it is all on me not the employer, since when can a employer tell a employee how to file????
    any input would be appreciated

    Thank you

    Jim

  34. I am married with 2 young children, and am the only wage earner in the family. Last year, because of refund credits, I received a refund that was larger than the tax I paid. I expect to earn the same income this year (within a few dollars). Should I select Exempt to save more money per paycheck? And if I do, will I still be able to get the extra money at refund time?

    1. Hi Matthew,
      It is possible to get a refund under earned income tax credit, but without seeing your exact income and deductions, I can’t say definitively. You can go to our W-4 estimator which helps you estimate how many exemptions you should claim
      http://turbotax.intuit.com/tax-tools/
      Thank you,
      Lisa Greene-Lewis

  35. Hi, I just started a job on January 5th in sales for satellite TV. It has been about 4 months now and I have not had taxes taken out of my check. My bosses also have not told me I have to pay quarterly or anything like that I am getting a little worried now. I am a full-time student, just got married last month, and have 3 children I claim on my taxes. From the 2011 Year we got refunded over $9000 federal and $1400 state. I only made about $13,000 working last year but it was an hourly pay with taxes taken out of my checks.

    What should I expect when it comes tax time next year and should I be paying money to the IRS now?

    I know I got the HOPE credit which gave me $1000, then the 3 kids on the EIC gave me thousands more. But will I be looking at close to $8000 or will i owe money? I am making about $1800/month on this job.

  36. I earned $366 working last summer and claimed exempt so I didn’t have anything taken out of my check. Do I need to file a federal and state tax return? My sister earned $1060 and also claimed exempt, does she need to file?

    1. Hi,
      If you are a U.S. citizen or resident alien, whether you must file a federal income tax return depends on your gross income, your filing status, your age, and whether you are a dependent. It sounds like either of you may not need to. In general if you are under 65, you do not have to file unless your income is over $9,500. There are also different stipulations if you are claimed as a dependent. Please see IRS pub 501 http://www.irs.gov/publications/p501/ar02.html#en_US_2011_publink1000220687.

      In addition, there may be valuable credits available to you both even if you don’t earn the amounts per the IRS.
      Thank you,
      Lisa Greene-Lewis

  37. I have a question. I file for exempt last year a few months after i switched jobs. Now i work for a different company and make $12.00 and hour full time. I am single, I do not have kids, and the only thing i pay for is a room in my brothers home. Can i file exempt this year?

  38. My sister made around 49,000 this year and started her own business. Her previous employer did not withhold taxes and she did not make any payments for the business. Can she still qualify for a refund

  39. I have a question, if you claim except for say only about 3 times in one year due to circumstances, but the rest of the year you are taxed federal, do you still get a refund?

    1. Hi Jamal,
      Without seeing all of your income and deductions, I cannot say definitively. Some people so still get a refund in this circumstance. It would depend on if you have enough tax deductions and on your income.
      Thank you,
      Lisa Greene-Lewis

  40. boyfriend who works full time at 19$/hr claims me and our daughter on his taxes. He had a job for the first five months of the year with our normal withholding @ 5-6, but when he switched jobs in June he put EXEMPT for some crazy reason, now I’m afraid we are screwed!! what kind of advise can I get because we are poor enough as it is without owing the IRS thousands of dollars too, plus his first boss is still not providing his W2!

    1. Hi,
      Without seeing your other deductions and income it’s hard to say, but with credits and deductions available you may be OK. You can try TurboTax, which will guide you through tax deductions and credits.
      http://turbotax.intuit.com/
      Thank you,
      Lisa Greene-Lewis

  41. im a full time student and i claimed exempt all year… is there a possibility that i can get anything back? n how do i go about it?

    1. Hi Rosana,
      It’s possible you may be eligible for refundable credits like the earned income tax credit as long as you had earned income and can not be claimed on someone elses tax return. You may also be eligible for one of the education credits or deductions. You can try TurboTax for free and see if you would receive a tax refund.
      Thank you,
      Lisa Greene-Lewis

    1. Hi Crystola,
      Yes you can still claim EITC as long as you earned income. EITC is a refundable tax credit meaning you may be eligible for a refund even if you did not have federal taxes withheld from your earnings.
      Thank you,
      Lisa Greene-Lewis

      1. execpt EITC discrimantes against people under the age of 25.

        most people under 25 cant get EITC.

        most likley due to older people in congress protecting there own interests.

      2. Hi Lisa
        I’m thinking of claiming exempt for a new job I’m starting tomorrow on my the W4 until the end of the year. I had no tax liability last year. This is my 3rd job this year. The other 2 I had normal taxes taken out. This new job does’nt pay much I need every penny to pay bills. I’m due a refund right now. I think I should be OK.

      3. Hi Kevin,
        Without knowing your exact income and deductions I cannot say for sure, but you can check how many withholding allowances you should take using our W-4 salary calculator. You can also use TaxCaster, our tax refund calculator to estimate your tax refund. Here is the link http://turbotax.intuit.com/tax-tools/. Please keep in mind the calculators are not updated for the 2012 tax year yet, but they can still give you a good estimate.
        Thank you,
        Lisa Greene-Lewis

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