Idaho 2018 Revised Withholding Tax Tables are Effective Immediately

The Idaho State Tax Commission recently passed House Bill 463 to conform to the 2018 Internal Revenue Code.  Idaho has published A Guide to Idaho Income Tax Withholding on April 27, 2018. The recent revision has significantly changed the withholding tables for 2018 and an updated allowance count for calculating the new child tax credit.

The withholding tables are effective May 1, 2018, and the agency recommends using the new tables immediately going forward.  The agency also recommends employees review their withholding each year to make sure the withholding reflects their current situation.

Idaho does not have a state equivalent of the Federal Form W-4. Employees should complete the Federal Form W-4 for both Federal and Idaho wage withholding tax purposes.

 How Do I Determine How Much Idaho Income Tax to Withhold? 

You must have a Federal Form W-4, Employee’s Withholding Allowance Certificate, (see example on page 19) on file for each employee. Since Idaho does not have a separate Form W-4, the employee must report the number of Idaho allowances on line 5 of the Federal Form W-4 after the Federal number. Employees can ask you to withhold more Idaho income tax. Employees should add this information on line 6 of the Federal Form W-4 after the Federal number. They cannot request that less Idaho income tax be withheld. Idaho has three approved methods for computing withholding detailed within the Publication.

The new income tax withholding tables and general information can be reviewed here: https://tax.idaho.gov/taxes/withholding/computing/.

Additionally, the agency has revised the supplemental rate for 2018 to 6.925%; previously 7.4%.

Thank you for choosing Paylocity as your Payroll Tax partner. Should you have any questions please contact your Paylocity Account Manager.

 This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.