August 29, 2023
W-4 Withholding Requirements and Forms by State
W-4 Forms and New Hires: Understanding the Importance.
When hiring new employees, one of the crucial administrative tasks that employers must undertake is collecting accurate tax information. This information is essential for ensuring proper withholding of taxes from employees’ paychecks, as it determines how much federal and state income tax should be withheld. While everyone is familiar with the federal W-4 form, it is equally important to collect state W-4 forms to comply with state-specific tax regulations. This blog will delve into the significance of collecting state W-4 forms from new hires and highlight the differences between federal and state W-4s.
Collecting state W-4 forms from new hires is vital because it enables employers to determine the appropriate amount of state income tax to withhold from employee wages. Each state has its own tax system and may impose different tax rates or have unique tax credits or deductions. By collecting state W-4 forms, employers can accurately calculate the amount of taxes to withhold from employee wages, ensuring compliance with state tax laws.
Most states require employers to collect W-4 forms from new hires. However, it is important to note that some states do not have state income tax, therefore exempting them from collecting state W-4 forms.
Which states do not collect W-4s?
These states include Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. These states rely on other means of generating revenue, such as sales taxes or higher corporate taxes, to fund their budgets rather than individual income taxes. Thus, employers in these states are only required to collect federal W-4 forms for tax withholding purposes.
Differences between federal and state W-4 forms.
While the federal and state W-4 forms serve the same purpose of determining tax withholding, there are a few notable differences between the two. Here are some key contrasts:
1. Filing Status:
Both forms require employees to indicate their filing status, such as single, married, or head of household. However, some states may have additional filing status options or variations that employees need to be aware of.
The federal W-4 form allows employees to claim allowances, which directly impact the amount of tax withheld from their paychecks. Each allowance reduces the amount of income subject to tax withholding. However, states may have different allowance calculations or may not use allowances at all. Some states may use a percentage-based withholding method, while others may have a fixed amount of withholding based on filing status or income.
3. Tax Credits and Deductions:
State W-4 forms often have sections where employees can claim state-specific tax credits and deductions. These credits and deductions can vary widely from state to state and can significantly impact the amount of tax withheld. Some common state-specific tax credits or deductions include education credits, childcare expenses, property tax exemptions, and income earned in another state.
4. Additional Withholding:
In addition to federal taxes, employees may need to have additional amounts withheld for state taxes. This is especially important if an employee works in a state with higher tax rates compared to their state of residency. State W-4 forms provide employees with the option to request additional withholding, ensuring they meet their tax obligations.
Given these crucial differences, employers must ensure they collect and review both federal and state W-4 forms from their new hires. Failure to comply with state-specific tax withholding requirements can lead to penalties and legal complications. Employers should stay informed about any changes in state tax regulations and update their processes accordingly to maintain compliance.
Collecting state W-4 forms from new hires is a critical task for employers. It ensures accurate withholding of state income taxes and compliance with specific state tax laws. While some states do not impose state income taxes and, therefore, exempt employers from collecting state W-4 forms, most states require this information. Understanding the differences between federal and state W-4 forms is essential for employers to accurately calculate tax withholdings for employees. By staying informed and maintaining accurate records of both federal and state W-4 forms, employers can fulfill their tax obligations and avoid potential penalties or legal issues.
W-4 Forms by State
|State||State W-4 Form|
|Alabama||Form A-4||Employee’s Withholding Tax Exemption Certificate|
|Alaska||N/A, no state income tax||no state income tax|
|Arizona||Arizona Form A-4||Employee’s Arizona Withholding Election|
|Arkansas||Form AR4EC||State of Arkansas Employee’s Withholding Exemption Certificate|
|California||Form DE 4||Employee’s Withholding Allowance Certificate|
|Colorado||Form DR 0004||Colorado Employee Withholding Certificate|
|Connecticut||Form CT-W4||Employee’s Withholding Certificate|
|D.C.||Form D-4||Employee Withholding Allowance Certificate|
|Delaware||Delaware W-4||Employee’s Withholding Allowance Certificate|
|Florida||N/A, no state income tax|
|Georgia||Form G-4||State of Georgia Employee’s Withholding Allowance Certificate|
|Hawaii||Form HW-4||Employee’s Withholding Allowance and Status Certificate|
|Idaho||Form ID W-4||Employee’s Withholding Allowance Certificate|
|Illinois||Form IL-W-4||Employee’s and other Payee’s Illinois Withholding Allowance Certificate and Instructions|
|Indiana||Form WH-4||Employee’s Withholding Exemption and County Status Certificate|
|Iowa||Form IA W-4||Employee Withholding Allowance Certificate|
|Kansas||Form K-4||Kansas Employee’s Withholding Allowance Certificate|
|Kentucky||Form K-4||Kentucky’s Withholding Certificate|
|Louisiana||Form L-4||Employee Withholding Exemption Certificate|
|Maine||Form W-4ME||Maine Employee’s Withholding Allowance Certificate|
|Maryland||Form MW507||Employee’s Maryland Withholding Exemption Certificate|
|Massachusetts||Form M-4||Massachusetts Employee’s Withholding Exemption Certificate|
|Michigan||Form MI-W4||Employee’s Michigan Withholding Exemption Certificate|
|Minnesota||Form W-4MN||Minnesota Employee Withholding Allowance/Exemption Certificate|
|Mississippi||Form 89-350-12-2||Mississippi Employee’s Withholding Exemption Certificate|
|Missouri||Form MO W-4||Employee’s Withholding Certificate|
|Montana||Form MW-4||Montana Employee’s Withholding Allowance and Exemption Certificate|
|Nebraska||Form W-4N||Employee’s Nebraska Withholding Allowance Certificate|
|Nevada||N/A, no state income tax|
|New Hampshire||N/A, no state income tax|
|New Jersey||Form NJ-W4||Employee’s Withholding Allowance Certificate|
|New Mexico||Form W-4||Employee’s Withholding Certificate|
|New York||Form IT-2104||Employee’s Withholding Allowance Certificate|
|North Carolina||Form NC-4||Employee’s Withholding Allowance Certificate|
|North Dakota||Form W-4,||Employee’s Withholding Certificate|
|Ohio||Form IT-4||Employee’s Withholding Exemption Certificate|
|Oklahoma||Form OK-W-4||Employee’s Withholding Allowance Certificate|
|Oregon||Form OR-W-4||Oregon Employee’s Withholding Statement and Exemption Certificate|
|Pennsylvania||N/A, everyone pays a flat rate unless exempt|
|Rhode Island||RI W-4||State of Rhode Island Division of Taxation Employee’s Withholding Allowance Certificate|
|South Carolina||SC W-4||South Carolina Employee’s Withholding Allowance Certificate|
|South Dakota||N/A, no state income tax|
|Tennessee||N/A, no state income tax|
|Texas||N/A, no state income tax|
|Utah||Form W-4||Employee’s Withholding Certificate|
|Vermont||Form W-4VT||Employee’s Withholding Allowance Certificate|
|Virginia||Form VA-4||Employee’s Virginia Income Tax Withholding Exemption Certificate|
|Washington||N/A, no state income tax|
|West Virginia||Form WV/IT-104||West Virginia Employee’s Withholding Exemption Certificate|
|Wisconsin||Form WT-4||Employee’s Wisconsin Withholding Exemption Certificate/New Hire Reporting|
|Wyoming||N/A, no state income tax|
Disclaimer: The information provided on this blog page is for general informational purposes only and should not be considered as legal advice. It is advisable to seek professional legal counsel before taking any action based on the content of this page. We do not guarantee the accuracy or completeness of the information provided, and we will not be liable for any losses or damages arising from its use. Any reliance on the information provided is solely at your own risk. Consult a qualified attorney for personalized legal advice.