Tax & Accounting Blog

Federal and State W-4 Rules

CS Professional Suite Payroll Solutions, Payroll June 8, 2015

The Payroll ReportLet’s take a look at W-4s this month. As we all know, this is the document that employees turn in to an employer to calculate federal and (sometimes) state withholdings.

There was once a time when – if the employee turned in a W-4 with more than 10 exemptions – the W-4 needed to be sent to the federal government for verification. This requirement no longer exists, except for California state withholdings.

Elsewhere, a lock-in letter replaced this requirement. If an employer receives a lock-in letter from the IRS, the employer is then required to use the IRS calculation of exemptions instead of the employee W-4. The rare exception is if an employee submits a new W-4 with more taxes that are calculated than the lock-in letter-again, this is very rare. A lock-in letter trumps a W-4 and must be put in place by the employer no more than 60 days after it is received.

“How many times can an employee change their W-4?” is a common question. Actually, there is no minimum or maximum number of times. However, an employer has up to 30 days to implement the change. Another common question is “Does a W-4 expire?” There is no expiration date for W-4s so you could be correct to use a 1984 (or any other year) W-4, if no change has ever been received from the employee.

Let’s talk about what constitutes a legal and acceptable W-4. The form can only contain the employee demographic information, marital status, and the number of exemptions, with an area for additional dollar amount of withholding and a box for exempt. Any alteration of this, like set percentage or set dollar amount of withholding, voids the W-4. If the employer does not have a valid W-4 for the employee, the employer is required to use either Single 0 or the last valid W-4 they have on file for the employee. Also, make sure you are using the correct year W-4 when the employee submits it to the employer.

2015 W-4

Now let’s look at the states. The W-4 is a federal document, and several states – but not all – accept the federal W-4. Below is a chart of states and what they accept. If the state has their own withholding form, then the federal W-4 is not allowed for state calculation of withholdings. You’ll notice that Pennsylvania does not have a state W-4-this is because the rate is a set percentage.

Legend
Red = Accepts Fed W-4
Green = Accepts Fed OR State W-4
*CA – 10 or more exemptions must be faxed or mailed to state

State Form
AL A-4
AK No WH
AZ A-4
AR AR4EC
CA DE-4*
CO FED W-4
CT CT-2-4
DE FED W-4
DC D-4
FL NO W/H
GA G-4
HI HW-4
ID FED W-4
IL IL-W4
IN WH-4
IA IA-W-4
KS K-4
KY K-4
LA L-4
ME W-4ME
MD MW-507
MA M-4
MI MI-W4
MN W-4MN
MS 89-350
State Form
MO MO W-4
MT FED W-4
NE FED W-4
NV N/A
NJ NJ W-4
NM FED W-4
NY IT-2014
NC NC_4
ND FED W-4
OH IT-4
OK FED W-4
OR FED W-4
PA NONE
PR .499r-4.1
RI FED W-4
SC FED W-4
TN N/A
TX N/A
UT FED W-4
VT W-4VT
VA VA-4
WA N/A
WV WV/IT_104
WI WT-4
WY N/A

Knowing the federal and state W-4 rules will assist you in correct calculations of withholdings and can assist employees with the requirements.