Understanding when to Use a State W-4 ~ Symphony Employer Solutions Keeps YOUR Business Compliant

Understanding When to Use a State W-4

What is a State W-4 Form?

A state W-4 Form is a state-specific tax document that serves as a guide for employees to calculate their state tax withholding requirements that translates into a specific amount based on each paycheck to go towards state taxes. It works similarly to a federal form W-4 in that it tells the employer about each employee’s withholding needs, but the calculation can be very different. Employees can claim state tax allowances for themselves, a spouse, or a child. The more state tax withholding allowances an employee claims on their state W-4, the less tax the employer will withhold.

Is There a Difference Between a State W-4 and a Federal W-4?

Yes, there is a difference between state W-4s and federal Form W-4. The federal W-4 is used to calculate federal withholding taxes. Every employee in the U.S. needs to complete a federal Form W-4 upon hire and whenever their withholding circumstances change, yet not every employee will fill out a state W-4. Your state tax withholdings and form requirements will vary depending on the specific state you reside in. Unless an employee works in a state with no state income tax, they must complete the required state W-4 state form when starting with a new employer – or each year to make sure their allowances are accurate.

Unfortunately, it becomes complicated in that most states have a state-specific W-4 but some states use the federal W-4 to determine the number of allowances to be used for state purposes and other states do not have a state income tax and therefore do not require a W-4 form to be completed for state purposes (employees in “no state tax” jurisdictions still are required to complete a Federal W-4.

Which States fall in each category (the New England states and New York are in Bold)?

States that do not have State Tax and don’t require state W-4s:

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.

States that use the Federal W-4 for state tax purposes:

Colorado, New Mexico, North Dakota, and Utah.

States have separate state tax withholding forms:

Employees should complete the form each year and give it to their employers, so the proper amount is withheld for state taxes.

 Alabama

 Arizona

 Arkansas

 California

∙ Connecticut

 District of Columbia

 Georgia

 Hawaii

 Illinois

 Indiana

 Iowa

 Kansas

 Kentucky

 Louisiana

 Maine

 Maryland

∙ Massachusetts

 Michigan

 Mississippi

 Missouri

 New Jersey

∙ New York

 North Carolina

 Ohio

 Oklahoma

 Oregon

 Pennsylvania

∙ Rhode Island

∙ Vermont

 Virginia

 West Virginia

 Wisconsin

Do State W-4 forms need to be kept by the employer?

Yes. After collecting and using your employees’ completed state W-4 forms, the employer must keep the completed form as part of the employee’s employment record. Symphony provides the option to store employee new hire documents securely in the cloud as part of our Essential and Advanced HR software which integrates with our online payroll.

Interested in simplifying your record-keeping in this post-pandemic environment? Let’s talk about your needs.

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