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.

2. Allowances:

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