Q: Can I use an electronic W-4?
A: Generally, the answer is yes, with a few qualifications. The electronic system you use must be able to verify that the information received is actually coming from the employee, and that the person accessing the system is actually the employee identified on the form. In other words, the system cannot allow anyone but the employee to complete a W-4 for that employee. The system also must keep track of every time each employee uses the electronic system to make changes to the W-4. Employers must provide a paper copy for any employee who objects to an electronic form, or who may not be able to use an electronic system.
While an employer does not have to make a copy of the form, the electronic W-4 must contain exactly the same information as the paper Form W-4 and must be signed by the employee under penalties of perjury. The perjury statement must contain exactly the language that appears on the paper W-4. The placement of the instructions and the perjury statement must be the same as the paper W-4. The statement must provide that the employee, under penalty of perjury, declares to have examined the certificate and confirms that it is true, correct, and complete to the best of the employee’s knowledge.
If employees are signing electronically, the electronic signature must identify the employee filing the electronic W-4. It also must verify and authenticate the signature. Employees must not be able to electronically sign the form until the rest of the form is completed – the signature has to be the last entry. If an employer does not have the capability to get an electronic signature that meets the above criteria, the employee must sign a paper copy.
If the IRS requests it, the employer must be able to provide a hard copy of the electronic W-4. In this circumstance, the employer must also provide a statement in writing that to the best of knowledge, the employee named on the form actually filed the electronic W-4. Again, the hard copy must contain exactly the same information as a paper W-4. [ Treas. Reg. § 31.3402(f)(5)-1(c) ]