Which criteria must be met for income to be exempt from federal income tax withholding?

For income to be exempt from federal income tax withholding, several specific criteria relate to the individual’s income level, tax liability, and dependency status.

Income level is significant because those earning below a certain threshold may not owe federal income tax, thereby not requiring withholding. Tax liability addresses whether an individual is actually required to pay taxes based on their financial situation. Lastly, dependency status can affect the individual's overall tax situation as dependents may qualify for certain deductions or credits that influence tax obligations.

Meeting these criteria allows taxpayers to correctly establish whether their income should be subject to withholding, ultimately leading to accurate and fair tax treatment. Other options presented, such as age and marital status, while potentially relevant in other tax calculations, do not directly relate to the exemption from withholding income tax. The scope of employment type or annual salary is also too narrow to encompass all necessary variables involved in determining withholding exemption. Furthermore, educational qualifications do not play a role in federal income tax withholding criteria.