Federal Income Tax Withholding 2024 Updates

Here are the updates for federal income tax withholding effective January 1, 2024:

• The annual additional amount for a nonresident alien employee, who was first paid wages before 2020 and has not submitted a Form W-4 for 2020 or later, increases from $9,550 to $10,300.

• The annual additional amount for a nonresident alien employee, who has submitted a Form W-4 for 2020 or later or was first paid wages in 2020 or later, increases from $13,850 to $14,600.

For more information, see the Federal Income Tax Withholding Methods: https://www.irs.gov/pub/irs-pdf/p15t.pdf

Alabama Overtime Pay Exemption Updates

Beginning on or after January 1, 2024, overtime pay received by a full-time hourly wage-paid employee for hours worked above 40 in any given week is excluded from gross income and, therefore, exempt from Alabama state income tax. This exemption requires employer reporting to ALDOR--employers must report the total aggregate amount of overtime paid and the total number of employees who received overtime pay.

For more information, see the Knowledge Base Article: New Alabama Overtime Pay Exemption effective 1/1/2024 through 6/30/2025.

Colorado 2024 Tax Updates

The updates for Colorado are effective January 1, 2024:

• The standard amount for employees with a federal filing status of married filing jointly or qualifying widow or widower increases from $9,000 to $10,000.

• The standard amount for all other filing statuses increases from $4,500 to $5,000.

For more information, see the Colorado Withholding Worksheet for Employers: https://tax.colorado.gov/sites/tax/files/documents/DR1098_2023.pdf

Connecticut 2024 Tax Updates

The updates for Connecticut are effective January 1, 2024:

• The two lowest tax rates in the withholding calculation rules for all withholding codes were decreased from 3% and 5% to 2% and 4.5%.

• The Phase-Out Add-Back tax rates were decreased from 3% to 2%.

• The Tax Recapture table has been updated.

Florida Reemployment Tax Electronic Filing

The updates for the Reemployment Tax XML Package are:

• For the name, address, and title fields, the pattern [ -)|+-ÿ]+ is replaced with ([A-Za-z0-9'\-] ?)[ -)|+-ÿ]+

• Refer to the RT_changes.xlsx file in the Reemployment Tax XML Package for all the changes from version 1.2.

• The Reemployment Tax XML Package (ZIP archive) includes the XML schema, XPath, guide, and test files for Forms RT-6 and RT-8A: https://floridarevenue.com/taxes/Documents/flRtXmlPkg.zip

For more information, see the Software Developer Information and Specifications webpage: https://floridarevenue.com/taxes/eservices/Pages/developerinfo.aspx

Georgia 2024 Tax Updates

The updates for Georgia are effective January 1, 2024:

• The 2024 withholding method uses a flat rate of 5.49%.

• The graduated tax rates used for supplemental payments are mostly unchanged, but the highest rate decreases from 5.75% to 5.49%.

• The personal allowance that depends on filing status has been removed.

• The standard deduction amount increases for the following statuses:

  • Married Filing Joint Return: From $7,100 to $24,000

  • Single or Head of Household: From $5,400 to $12,000

  • Married Filing Separate Return: From $3,550 to $12,000

For more information, see: https://dor.georgia.gov/employers-tax-guide

Illinois 2024 Tax Update

Effective January 1, 2024, the value of state allowance increases from $2,425 to $2,775.

Indiana 2024 Tax Updates

The updates for Indiana are effective January 1, 2024:

• The state rate decreases from 3.15% to 3.05%.

• The employer is not required to withhold state or country income tax on some employees if the employee will work in Indiana for 30 days or less during the taxable year.

For more information, see the Indiana Department of Revenue Departmental Notice #1: https://www.in.gov/dor/files/dn01.pdf

Iowa 2024 Tax Updates

The updates for Iowa are effective January 1, 2024:

• The withholding formula decreases from four tax brackets to three tax brackets of 4.4%, 4.82%, and 5.7%.

• The state standard deduction increases from $13,850 to $14,600 or $27,700 to $29,200 annually, depending on the state allowances claimed.

• The state allowances are represented as dollar values.  

For more information, see the Iowa Withholding Formula Instruction 2024:
https://tax.iowa.gov/sites/default/files/2023-12/IowaWithholdingFormulaInstructions2024.pdf

 

Missouri 2024 Tax Updates

The updates for Missouri are effective January 1, 2024:

• The withholding formula tax rate range decreases from 0% to 4.95% to 0% to 4.8%.

• The state supplemental tax rate decreases from 4.95% to 4.8%.

• The state standard deduction increases for all filing statuses.   

 

For more information, see the 2024 Missouri Withholding Tax Formula: https://dor.mo.gov/forms/Withholding%20Formula_2024.pdf

Montana 2024 Tax Updates

The updates for Montana are effective January 1, 2024:

• The supplemental tax rate decreases from 6% to 5%.

• Employees are required to use the same filing status they use for federal purposes.

• There are new tax brackets.

Filing Statuses

The possible filing statuses on the MW-4 are as follows:

• Single or married filing separately

• Married filing jointly with both spouses working

• Married filing jointly or qualifying widower

• Head of household

Beginning January 1, 2024, employees should complete a new Form MW-4 to ensure that the correct amount of Montana income tax is withheld from their wages. For more information, see https://mtrevenue.gov/wp-content/uploads/dlm_uploads/2023/11/MW-4-2.pdf

Montana Withholding Formula

The Montana withholding formula is calculated as follows:

W = A + (B × (G – C))

G = Gross earnings for the payroll period

W = Withholding tax for the payroll period

All amounts to be withheld must be rounded up to the nearest dollar.