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Voluntary Withholding

What is Voluntary tax withholding?

If you receive income from social security benefits or unemployment compensation, you can choose to have income tax withheld from the payments. To make this choice, you will have to fill out a Form W-4V, Voluntary Withholding Request.

Social Security benefits withholding

Social security benefits are reported on Form SSA-1099, Social Security Benefit Statement and the voluntary withholding is shown in box 6. You may choose to have:

  • 7%
  • 10%
  • 15% or
  • 25%

withheld from each payment, but no other percentage or amount.

Withholding of unemployment compensation

Box 4 of the Form 1099-G, Certain Government Payments, shows the taxes withheld from your unemployment compensation. For unemployment compensation, the payer is permitted to withhold 10% from each payment. No other percentage or amount is allowed.

Withholding of private retirement income

For most private retirement income, federal income tax will be withheld unless you choose not to have it withheld. To not have any amount withheld, you must file the form W-4P, Withholding Certificate for Pension or Annuity Payments, with the payer of your retirement benefits. If income tax is withheld from your retirement income, the amount is shown in box 4 of Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit Sharing Plans, IRAs, Insurance Contracts, etc. which reports retirement distributions made to you.


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