Idaho Tax Department Releases Revised Employer Guide and Form W-4 Worksheet

The Idaho State Tax Commission has released a further revision to the publication, A Guide to Idaho Income Tax Withholding, containing several updates. The Commission has also created a Form W-4 worksheet that Idaho employees can use to determine how to complete the form for Idaho income tax withholding purposes.

These changes are directly correlated to the Idaho 2018 revised withholding tax tables which were recently enacted earlier this year by Idaho tax reform legislation House Bill 463. This state legislation:

• Conformed Idaho tax law to the Federal Internal Revenue Code for tax year 2018
• Changed the withholding tables
• Eliminated the personal and dependent exemptions and most itemized deductions
• Reduced the supplemental withholding rate
• Changed the method for claiming state allowances on the federal Form W-4To review the original Paylocity Tax Alert, click here.

New Form W-4 Worksheet 

Employees should use the worksheet to estimate their Idaho allowances and any extra state withholding that may be required. The Commission recommends that all employees update their W-4s using the worksheet.

Idaho uses the Federal Form W-4; therefore, employees can request a different Idaho income tax withholding amount by claiming fewer dependents for Idaho purposes. Employees can add this information at the bottom of the Federal Form W-4 they give you. They cannot request less Idaho income tax withheld by listing more dependents.

Key Changes to the Guide to Income Tax Withholding

• In the Percentage Computation Method instructions on page 20, the employer’s requirement to “add 2” for the single filing status with one or more withholding allowances is eliminated.
• Revisions were made to the single tables using the Wage Bracket Method (beginning on page 26).

Please note that the supplemental withholding rate remains 6.925%.

For more information on Idaho withholding taxes, please visit the agency’s website.

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.