W-4 Withholding Requirements and Forms by State

August 29, 2023

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  

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