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 (173) Leave your comment

  1. I am an home care provider I had 3 clients in the whole year 2 of them I went exempt because I was getting less then 60 hours a month and the other client of 82 hours a month I didn’t go exempt I let federal take their money.And the last 3 to four months I became an independent contracter under the 1099 tax exemption, when I file will I owe taxes or will it balance out because I paid taxes with one of the jobs last year.What are my options?

  2. I have one dependant to claim on my taxes and im a full time college student with a full time job. Is it possible for me to file exempt for the year of 2016 and still get a tax return?

  3. I started a new job and On my checks for last 6 months they say i have 6 extemptions and I have had no federal taxes taken out. It’s only me and my daughter. Do I still get a refund?

    1. Hello I clamied 4 all year and the last 3 months I claimed exempt I made 30k I claim my daughter and head of household will I still get a tax refund?

      Thank you

  4. I have been working at my job for a year in a half. 2015 Was my year that i worked straight through i filed exempt for 9 months claiming 2 me and my son will i owe ? and can i still file ? i do not make over the required amount the only reason i filled exempt was to be able to make it through the year

  5. If I only made around $10,000 this year and next year to be making $18,000 can i still claim exempt with two dependants?

  6. I filled my w-4 for out for my new job the same as I have always done. On my w-2 for the current year it is saying that I have 7 exemptions and the box for my federal is 0. This has never happened to me before. I am no longer working at this job. Did I do my w-4 wrong or is the federal 0 because I didn’t even make $13,000 throughout the year?

  7. Hi, I have a job that I will be working for about a week during the holidays but I also have a job that I have been working all year. Could I legally file exempt for the holiday job and it not affect my tax return from the other job. I figure I will make about $400 from the holiday job. Thanks!!!!

  8. Can I do taxes if I did exempt for state will I still qualify for the other refund because I know its 2 checks you get

  9. Ok here is what I am needing to know… I am a single head of household and I have 1 dependent. He is 5 years old. I pay for before and after school which totals $400.00 monthly. I usually get some sort of refund but am interested to know if I will benefit if I file exempt. I make around $35,000 a year.

  10. Say I he payed $45.000 yearly and I claimed 1 at my tax . Am I gonna get a tax return at the end of the year or not . Thanks for answering .

    1. Hi Kaissa,
      It’s possible. Without knowing your full situation it’s hard to say, but you may be eligible for tax deductions and credits like Earned Income Tax Credit or credits for a dependent. TurboTax will guide you through all of the tax deductions and credits you are eligible for. You don’t need to know the tax laws.
      Thank you,
      Lisa Greene-Lewis

      1. I made around 80000 last year and I did tax exempt 5 times and it shows I owe 3200!! Anyway I can overcome that?

  11. I make hourly and commission and I withheld around 3 times this year! can I still get tax refund? also how many times I can withheld

    1. Hi Robbie
      If you made any estimated tax payments during the year and they are more than your tax, you would receive a refund. There are also cases where even if you filed exempt you may receive a tax refund if you are eligible for refundable tax credits like the Earned Income Tax Credit.
      Thank you,
      TurboTax Sherri

  12. Hello my name is hector and I did the same mistake. For financial reasons I went exempt the hole year and I made close to 100,000.00 I have 5 kids would that help me in any way not to go over? or will I still have to pay? Or maybe by luck get some money back? Any suggestions?

  13. My dependent child worked last summer before entering college. She earned approximately $6,000. Can I still claim her as a dependent and/or does she have to file as an independent? I am supporting her.

  14. I’m in the same boat as a lot of people i seen comment on here. I always file 0 for exempt but I’m getting a bonus soon and want to get more money but i don’t want to do anything to hurt me at the end of the year. Will it hurt me to file 1 or 2 exemptions for 1 paycheck will it make that much of a difference when i file at the end of the year.

    1. If you only file 1, which is what I do you will be fine. filing single 1″ they take almost as single 0. Since learning about filing exempt and the bad experience I had with it, I now always file singe 1 and this year I am getting a refund. 2 won’t hurt you either but really 1 is pretty good and you most likely will get a refund at the end of the year.

  15. Hello, I have a question for you for the year of 2014 I have had federal taking out of my check I stopped working in July I received 2 more paychecks but I filed exempt for the last two paycheck I still will be able to file and get a tax refund right I have 2 dependents.

  16. Turbo Tax Lisa- I saw several unanswered questions on the same topic, but hope you may assist. At my company (in Illinois), each employee may change their elections each pay period. I filed exempt twice for a total of 6-8 pay periods and switched back each time (as soon as financially possible). Several checks I withheld nearly my whole check by entering a $ amount – this was so the $ impact of clicking except is lessened or hopefully offset. I plan to have my last checks of year set appropriately to non-exempt so it’s correct on my tax forms. At no point should I be exempt status but I needed the $ financially, but I later tried to pay back in subsequent checks. Will I be somehow penalized for electing except just for financial need? Will I be targeted for audit?

    I appreciate your professional advice. Thank you

  17. Hi I’ve filed exempt from March – October if I stop filing exempt now will I receive a refund check? I average around 26,000 and I claim 1 dependant.

Leave a Reply