4029 Exemptions

Reminder – 4029 exemptions

As you are likely aware, Form 4029 must be filed in order to claim an exemption for Social Security, Medicare or Self-Employment.  On approval, the Internal Revenue Service will issue a certification: we would like to remind you to retain this document in your files.

If you are paying employees in your business, both you as the employer and the employee must have a certification in order for the exemption to apply to Social Security and Medicare withholding.  Wages that are paid to employees that have not applied for the exemption or have not received a certification are subject to the Social Security and Medicare withholding.  In addition to the withholding requirement, you as the employer, are required to pay the employer share of these taxes.  We would like to remind you to obtain a copy of the certification for any employees that are exempt and retain this documentation in your files.

The 4029 exemption does not apply to any Federal or state unemployment taxes.  You will be required to file and pay unemployment for all employees unless another type of exemption applies, such as a child under age 21.

Employers that may qualify for the exemption are sole proprietorships and partnerships; however corporations are not eligible.  For a partnership, all partners must obtain certification of the exemption.

We would happy to assist you or respond to any questions that you may have.


Westbrook CPA