TN 37 (11-15)

A. VTW requests

1. IRS Form W-4V (Voluntary Withholding Request)

The beneficiary or his or her representative payee must complete and sign an Internal Revenue Service Form W-4V in order to make a voluntary tax withholding (VTW) request. NOTE: This includes requests to stop as well as to start VTW.

A beneficiary or his or her representative payee requesting VTW must complete additional forms for each separate action requested. A beneficiary or his or her representative payee must also submit a separate W-4V for each beneficiary requesting VTW. Return all unsigned forms to the beneficiary or his or her representative payee for signature.

Send the beneficiary a Form W-4V at his or her request. If a teleservice representative (TSR) or SPIKE mails out the form to a beneficiary, enclose a courtesy return envelope addressed to the field office.

NOTE: Do not require a completed W4-V when a beneficiary files a Modernized Claims System (MCS) claim. Enter the VTW information on the MCS VTW screen. The VTW request prints within the application that the beneficiary signs. This satisfies the IRS signed statement requirement.

2. Retaining W-4V

After successfully inputting the W-4V via the Postentitlement Voluntary Tax Withholding (PEVW) screen of the Postentitlement Online System (POS), scan the signed W-4V into Non-Disability Repository for Evidentiary Document (NDRED). Review the document for accuracy in the Claims Folder Records Management System (CFRMS) and destroy the original document. For more information on the Postentitlement Voluntary Tax Withholding (PEVW) screen, see MSOM T2PE 003.020

3. Limited number of simultaneous action requests simultaneously

The beneficiary or his or her representative payee can request up to three withholding actions at one time. For VTW coding on the Voluntary Tax Withholding (VTWH) screen, see MSOM MCS 009.012

If the VTW request is for future date(s) only:

• input 0 percent for the current month; and

• then input the subsequent VTW request percentage(s) and effective date(s).

Obtain a separate W-4V for each requested VTW rate change.

4. VTW examples

EXAMPLE 1 – Closed period VTW request with multiple withholding rates

In January, Anna submits three separate W-4V forms to request a 7 percent VTW beginning immediately, a change to 15 percent VTW in August, and termination of VTW (0 percent) in November, all in the same year. We can complete and input these requests at one time.

EXAMPLE 2 – VTW request received too late for requested date of initial withholding

In late March, Paul requests immediate VTW of 7 percent effective with the payment issued in April, current operating month (COM) 3. However, we have to begin withholding with the payment issued in May, COM 4, because the request was received and processed after the COM change and it is too late to begin VTW with the payment issued in COM 3.

EXAMPLE 3 – VTW request for future date

In March, Marie submits a W-4V form to request a 7 percent VTW effective with the payment issued in July. Input 0 percent for March with a change to 7 percent effective in July.

EXAMPLE 4 – More than three VTW rate requests

In September 2014, Allan submits three separate W-4V forms to request VTW of 7 percent immediately, 10 percent in March 2015 and 25 percent in July 2015. We can input all three actions at one time.

In December 2014, he submits an additional change to his initial VTW requests. He now requests 15 percent VTW effective September 2015 but wants his earlier withholding requests to remain in effect until then. We cannot accept the September 2015 change at this time because:

• There are currently three VTW occurrences coded; and

• We can only input three VTW actions at one time.

We will instruct Allan to come back no earlier than March 2015 to request the September 2015 change.

EXAMPLE 5 – VTW request with RRB involvement

Paula is in LAF E status as a RRB annuitant. She requests VTW of 7 percent of her benefit effective with the payment issued in July 2014. Since Paula may also be receiving an RRB annuity, advise her to check with RRB to see if this withholding will adversely affect her RRB annuity. If she still wants VTW after checking with the RRB, input her request.

5. Notification of VTW Implementation

Notify the beneficiary or his or her representative payee when we take action to effectuate, terminate or change the VTW (for example, when we process an immediate request or a future request).

B. References

• SM 00510.145 MBR Data Lines

• SM 00545.000 PHUS Data Fields

• SM 00630.160 PHUS Events

• SM 03045.700 VTW Process

• MSOM T2PE 003.020 PEVW Screen

• MSOM MCSEC 001.028 DVTW Screen

• MSOM MCS 009.012 VTWH Screen 1

C. Dual entitlement and VTW systems instructions

1. Basic rules for Dual Entitlement

When the request involves dual entitlement:

• Apply VTW requests to any account on which the beneficiary is or will be receiving Title II payments (LAF codes C or D).

• Keep combined dual entitlement payments on one account if the beneficiary requests us to tax each benefit at the same tax rate.

• Split combined dual entitlement payments to their source accounts if the beneficiary requests us to tax each benefit at a different tax rate.

NOTE: MCS will process a dual entitlement claim as long as the requested VTW percentages are the same.

2. VTW dual entitlement case scenarios

a. Beneficiary makes a single VTW request

EXAMPLE 1 – Dual entitlement payments combined

Most often, when a dually entitled beneficiary is receiving one combined dual entitlement payment, he or she will request VTW on the total payment. Process the VTW request as if dual entitlement were not involved. Have the beneficiary fill out one W-4V form and input the request on the full dual entitlement payment Claim Account Number (CAN)/Beneficiary Identification Code (BIC) via Post Entitlement Online System (POS) or Manual Adjustment, Credit, and Award Data Entry (MACADE). The other dual entitlement account does not need VTW request data (VTAX REQ), as long as we are not issuing payments from that account.

When a beneficiary files a claim that will result in a combined dual entitlement payment, the same filing rules apply as in post entitlement actions, except that an MCS application may replace the W-4V form. NOTE: Since VTW and dual entitlement are involved, process the award via MACADE. Do not code VTAX REQ data on any other dual entitlement account where we are not issuing payments.

EXAMPLE 2 – Dual entitlement payments separate

If a dually entitled beneficiary wants the same tax rates withheld from two accounts, have the beneficiary fill out one form identifying the two CAN/BICs to which we should apply the tax rate. Input an action against each dual entitlement payment CAN/BIC via POS or MACADE.

The same filing rules apply when awarding separate dual entitlement payments as in post entitlement actions, except that the MCS application may replace the W-4V form. Be sure to post VTAX REQ data on all payment accounts.

b. Beneficiary makes multiple VTW requests

EXAMPLE 1 – Dual entitlement payments separate

Complete two W-4V forms if a dually entitled beneficiary wants different tax rates withheld from two accounts, and we are issuing payments on two accounts (Complete one W-4V for each account, indicating the respective VTW percentages). Process each request against the respective dual entitlement payment via POS or MACADE.

The same filing rules apply if a beneficiary is receiving separate dual entitlement payments, except that the MCS application(s) may replace the W-4V forms. VTAX REQ data must be on both accounts when we take the two MACADE actions.

EXAMPLE 2 – Dual entitlement payments combined

If a dually entitled beneficiary wants different tax rates withheld from each account, and we are combining both payments on one account, complete two W-4V forms, one for each account indicating the respective withholding percentages.

Since we need to separate the existing combined dual entitlement payments via MACADE, route all W-4V forms to the controlling processing center. Instruct the processing center to separate the payments due to VTW. VTAX REQ data must be on both accounts when we take the two MACADE actions. For dual entitlement awards when the beneficiary or his or her representative payee want different withholding rates on each account, the same rules apply as above, except that the MCS application may replace the W-4V forms.

c. Decombining dual entitlement payments for non-VTW reasons when the beneficiary also has VTW

When splitting dual entitlement payments for a non-VTW reason, and the beneficiary has VTW, tax resulting payments based on the existing VTW request. In the MACADE action on the new payment account, use the VTAX REQ data from the previous payment account.