Federal Withholding Tables and Payroll-Related Inflation-Adjusted Amounts for 2022

The federal government has released a finalized version of the federal withholding tables. Among the updates are the following:

• The annual amount to add to the wages of nonresident alien employees will be $12,950 when calculating the withholding from Forms W-4 filed in 2020 and later. For more information, see: 2022 Publication 15-T.

• The safe harbor affordability rate will be 9.61%. For more information, see: https://www.irs.gov/pub/irs-irbs/irb21-35.pdf. 

The annual withholding allowance remains at $4,300 in 2022.

Various amounts in the Internal Revenue Code have also been adjusted for inflation in 2022. The inflation-adjusted amounts were released in Revenue Procedure 2021-45. Payroll-related amounts that are to change include, but are not limited to, the following:

• The individual income tax brackets increase, with the highest 37% bracket starting at $539,900 for single individuals or $647,850 for married couples filing jointly (up from $523,600 or $628,300, respectively).

• The standard deduction increases from $12,550 to $12,950 for single individuals, from $25,100 to $25,900 for married couples filing jointly, and from $18,800 to $19,400 for heads of households.

• The monthly exclusion limit for qualified transportation fringe benefits and parking benefits increases from $270 to $280.

• The revenue procedure also adjusts the amounts of several penalties.

For more information about inflation-adjusted amounts and adjusted penalty amounts, see: Revenue Procedure 2021-45.

California 2022 Tax Updates

Updates for California include the following:

• The annual standard deduction that is used in the Method B exact calculation method (and instructions) is either $4,803 or $9,606, up from $4,601 or $9,202. The deduction amount depends on the employee's filing status and, for married employees, the number of state allowances claimed.

• The value of a state allowance increases from $136.40 to $141.90. 

• The tax rates in Method B continue to range from 1.1% to 14.63%, while the tax brackets have been adjusted compared to 2021.

For more information, see the following:

• Method B - Exact Calculation Method

• Method B - Exact Calculation Method (Instructions)

District of Columbia SUTA Electronic Filing: ICESA Record Updates in DCETS

A modernized tax system, the District of Columbia Employer Tax System (DCETS), for UI Tax program services, will replace the existing Employer Self Service Portal (ESSP). The transition to the new system is expected to happen in early 2022, according to the Department of Employment Services.

What's New

• Employers will be allowed to report out-of-state quarterly taxable wages submitted to US states other than the District of Columbia (including the 50 US states, Puerto Rico, and the US Virgin Islands).

• Employers will be required to identify the state to which any reported out-of-state taxable wages are paid.

• Within the Wage Amendment Process, employers will be required to select a reason for the amendment at the employee level and provide a narrative description when "Other" is reported as the reason. These requirements are detailed in the sections for each file type.

 

Employer ICESA Record Type A

Old

Location	Contents of Field	Field Length	Description	Required
208-242	Blank	35	Fill with spaces.	Fill with spaces.
243-250	Media Creation Date	8	The date the file was created. Format as MMDDCCYY.	Yes
251-275	Blanks	25	Fill with spaces.	Fill with spaces.

 

New

Location	Contents of Field	Field Length	Description	Required
208-247	Transmitter Email Address	40	Contact Email Address	Yes
248-255	Media Creation Date	8	The date the file was created. Format as MMDDCCYY.	Yes
256-275	Blanks	20	Fill with spaces.	Fill with spaces.

 

 

Employer ICESA Record Type E

Old

Location	Contents of Field	Field Length	Description	Required
149-153	Zip Code Extension	5	Four-digit extension of ZIP code. Be sure to include the hyphen in position 149. Fill with spaces if there is no extension.	No
154-158	Zip Code	5	Business ZIP code	Yes

 

New

Location	Contents of Field	Field Length	Description	Required
149-153	Zip Code	5	Business ZIP Code	Yes
154-158	Zip Code Extension	5	Four-digit extension of ZIP Code. Be sure to include the hyphen in position 154. Fill with spaces if there is no extension.	No

 

Employer ICESA Record Type S

Old

Location	Contents of Field	Field Length	Description	Required
135-146	Blanks	12	Fill with spaces.	Yes
147-161	State Unemployment Insurance Account Number	15	State UI employer account number. Right justify and fill with spaces.	Yes
162-176	Blanks	15	Fill with spaces.	Fill with spaces.
177-177	Adjustment Reason	1	Numeric - Reason code for adjustment to employee wages. 0 means original filing. Valid adjustment reason codes are 1, 2, 3, 4, 5, 7, and 8. See appendix 11.2 for code values.	Yes
178-209	Blanks	32	Fill with spaces.	Fill with spaces.
210-210	Owner/Officer Relationship	1	Include the owner/officer relationship of the worker. See appendix 11.1 for code values.	Yes
211-214	Blanks	4	Fill with spaces.	Fill with spaces.
215-220	Reporting Quarter and Year	6	The last month and year for the calendar quarter for which this report applies (for example, "032022" for Jan-Mar of 2022).	Yes
221-226	Month the employee was first employed	6	The month and year when the employee was first employed (for example, "031997")	No. Fill with spaces if there are no data.
227-232	Month the employee became separated from employment	6	The month and year when the employee was separated (for example, "031997")	No. Fill with spaces if there are no data.
233-275	Blanks	43	Fill with spaces.	Fill with spaces.

 

New

Location	Contents of Field	Field Length	Description	Required
135-141	Out of State Wage State Code	7	Reference Section 10.5 for Out of State Wage State Code; Cannot be DC. Required if Out of State QTR Unemployment Insurance Taxable Wages value is not null. Left pad with zeros; two character integer value	Conditional
142-146	Blanks	5	Fill with spaces.	Fill with spaces.
161	Employer Account ID	15	Employer account number Employer Account ID will be 6 characters in length, right justified with spaces.	Yes
162-164	Location/Unit	3	Employer location/Unit Right justify and fill with spaces. If blank, defaulted to primary location.	No
165-209	Blanks	45	Fill with spaces.	Fill with spaces.
210-210	Owner/Officer Relationship	1	Include the owner/officer relationship of the worker Zero (0) for Employee. One (1) for Officer	Yes
211-211	Blanks	1	Fill with spaces.	Fill with spaces.
212-212	Employed on payroll for 12th of month, Month 1	1	Will indicate whether the employee was included on the payroll that included the 12th of the month for the first month of the quarter: 0=No 1=Yes	No
213-213	Employed on payroll for 12th of month, Month 2	1	Will indicate whether the employee was included on the payroll that included the 12th of the month for the second month of the quarter: 0=No 1=Yes	No
214-214	Employed on payroll for 12th of month, Month 3	1	Will indicate whether the employee was included on the payroll that included the 12th of the month for the third month of the quarter: 0=No 1=Yes	No
215-220	Reporting Quarter and Year	6	The last month and year for the calendar quarter for which this report applies (for example, "032022" for Jan-Mar of 2022)	Yes
221-226	Month the employee was first employed	6	The month and year when the employee was first employed (for example, "031997") Format is MMYYYY.	No. Fill with spaces if there are no data.
227-232	Month the employee became separated from employment	6	The month and year when the employee was separated (for example, "031997") Format is MMYYYY.	No. Fill with spaces if there are no data.
233-247	Out of State QTR Unemployment Insurance Taxable Wages	15	Employee’s Out of State (OOS) UI taxable wages reported to other state prior to wages reported to DC for work performed in DC in accordance with localization of work rules. OOS taxable wages should be YTD for all quarters including current quarter and only be reported here IF this is the employee’s first quarter reporting wages to DC in the current year. Include the cents but no decimal. Right justify and pad with zeros (0). For example, 25.64 should be included as: 000000002564	No
248-249	Adjustment Reason	2	Numeric - Reason code for adjustment to employee wages Zero (00) means original filing. Valid adjustment reason codes are one (01) through ten (10). Refer to Section 10.2 Adjustment Reason Codes for valid reason codes.	Yes
250-275	Adjustment Reason Description	25	Adjustment Reason Description if Adjustment Reason is Code 10 (Other) Required only if Adjustment Reason Code is 10, else must be null	Conditional

 

For the complete ICESA file layout, as well as the file layouts of other available file types such as EFW2, extensible markup language (.xml), and comma-separated values (.csv) files, see the following DCETS wage file format specifications: https://essp.does.dc.gov/DCETSWageFileSpecs_121.pdf.

Illinois 2022 Tax Updates

The personal exemption amount increases to $2,425. For more information, see: https://www2.illinois.gov/rev/forms/withholding/Documents/CurrentYear/IL-700-T.pdf. 

Iowa 2022 Tax Updates

Iowa has released its 2022 withholding formula updates:

• Income tax brackets have been adjusted.

• The standard deductions have increased from $2,130 to $2,210 (for employees claiming 0 or 1 state allowances) and from $5,240 to $5,450 (for employees claiming 2 or more state allowances).

For more information, see IA Withholding Formula and Instructions TY2022.

Iowa 2021 State W-2 Electronic Filing

Updates for Iowa include the following:

• The Business eFile Number (BEN) is no longer required, but can still be listed.

• The State Employer Account Number can be either the 9-digit or 12-digit Iowa Withholding Permit Number. Iowa is moving away from the 12-digit permit number. New withholding permits issued in GovConnectIowa will be 9-digits.

Iowa W-2 specifications are based on the Social Security Administration's EFW2 format. For more information on filing W-2s, see: https://www.ssa.gov/employer/EFW2&EFW2C.htm. 

For more information on Iowa's Electronic Reporting of Wage & Tax Statements and Information Returns, see: https://tax.iowa.gov/electronic-reporting-wage-tax-statements-and-information-returns. 

Kentucky 2022 Tax Updates

The standard deduction amount increases from $2,690 to $2,770. For more information, see: https://revenue.ky.gov/News/Pages/DOR-Announces-Annual-Adjustment-of-Standard-Deduction-for-2022-Tax-Year.aspx.

Michigan 2022 Tax Updates

The personal exemption amount increases from $4,900 to $5,000. For more information, see: Taxes - 2022 Withholding Information (michigan.gov).

Missouri 2022 Tax Updates

Missouri's 2022 employer's tax guide includes the following updates:

• The highest tax rate decreases from 5.4% to 5.3%. This is also the supplemental withholding rate.

• The tax brackets used in the formula have been adjusted.

• The standard deduction amounts have increased for the following employee statuses. The new amounts are:

  • Single: $12,950

  • Married and Spouse Works or Are Filing Separately: $12,950

  • Married and Spouse Does Not Work: $25,900

  • Head of Household: $19,400

For more information, see: Missouri Employer's Tax Guide.

Nebraska SUTA Electronic Filing: 512 Byte Layout Updates

Data records RA, RT, and RF have been added to the 512 Byte Format, while records RE and RS have been updated. Previously, only RE and RS records were required in the 512 byte file.

The following table lists updates in the records.

Old	New

RE 7	Agent Indicator Code	RE 7	Blank
RE 8-16	Employer/Agent Employer Identification Number (EIN)	RE 8-16	Federal Employer Identification Number (FEIN)
RE 17-25	Agent for EIN	RE 17-39	Blank
RE 26	Terminating Business Indicator
RE 27-30	Establishment Number
RE 31-39	Other EIN
RE 179-201	Foreign State/Province	RE 174-221	Blank
RE 202-216	Foreign Postal Code
RE 217-218	Country Code
RE 219	Employment Code
RE 220	Tax Jurisdiction Code
RE 221-512	Blank	RE 222-223	Reporting Quarter
	Blank	RE 224-233	NE Tax Account Number
RS 5-9	Tax Entity Code	RS 5-9	Blank
RS 69-72	Suffix	RS 69-196	Blank
RS 73-94	Location Address
RS 95-116	Delivery Address
RS 117-138	City
RS 139-140	State Abbreviation
RS 141-145	ZIP Code
RS 146-149	ZIP Code Extension
RS 155-177	Foreign State/Province
RS 178-192	Foreign Postal Code
RS 193-194	Country Code
RS 195-196	Optional Code
RS 214-224	State Quarterly Unemployment Instance Total Taxable Wages	RS 214-217	Hours Paid
RS  225-226	Number of Weeks Worked	RS 218-247	Blank
RS 227-234	Date First Employed
RS 235-242	Date of Separation
RS 248-267	State Employer Account Number	RS 248-257	State Employer Account Number
RS 268-273	Blank	RS 258-382	Primary Job Title
RS 274-275	State Code
RS 276-286	State Taxable Wages
RS 287-297	State Income Tax Withheld
RS 298-307	Other State Data
RS 308	Tax Type Code
RS 309-319	Local Taxable Wages
RS 320-330	Local Income Tax Withheld
RS 331-337	State Control Number
RS 338-341	Employee Hours Paid
RS 342-466	Employee Job Title
RS 467-487	Supplemental Data	RS 383-512	Blank
RS 488-512	Blank

For more information, see the following:

• https://dol.nebraska.gov/webdocs/Resources/Items/512_Byte_File_Specifications_Document-Single_Employer.pdf

• https://dol.nebraska.gov/UITax/UnemploymentInsuranceTax/FileTransfersTaxForms

Starting in 2022, Nebraska will also require the RT record for SUTA Electronic Filing. To ensure that all the required data in the RT record is populated when processed in Vantagepoint, the following fields have been added to the Miscellaneous tab of the Quarterly Processing form (in the desktop application) for Nebraska:

• Combined Tax Rate: Enter the combined tax rate in this field.

• Combined Tax Due: Enter the combined tax due in this field.

North Carolina 2022 Tax Updates

Updates for North Carolina include the following:

• The withholding tax rate changes to 5.09%.

• The standard deduction amount increases from $10,750 to $12,750 for employees who are Single, Married, or Surviving Spouse.

• The standard deduction amount increases from $16,125 to $19,125 for employees who are Head of Household.

For more information, see: https://www.ncdor.gov/media/12821/open. 

North Dakota 2022 Tax Updates

North Dakota's 2022 withholding methods continue to accommodate all Forms W-4. The state provides two methods, one for pre-2020 Forms W-4 and one for Forms W-4 from 2020 or later, as it has each year since 2020. 

The value of an allowance for a pre-2020 Form W-4 is at $4,300 annually, unchanged from 2021. The tax brackets in both formulas have been adjusted, while the tax rates continue to range from 0 to 2.9%, with a supplemental tax rate of 1.84%.

For more information, see: https://www.tax.nd.gov/.

Rhode Island 2022 Tax Updates

Updates to Rhode Island taxes include the following:

• The value of a state allowance used in the withholding methods remains at $1,000 annually. However, the income threshold above which the value of an allowance is zero has increased from $234,750 to $241,850.

• The tax brackets used in the percentage method have been adjusted. The tax rates continue to range from 3.75% to 5.99%.

• The employer's withholding guide also includes the 2022 version of Form RI W-4 (Employee's Withholding Allowance Certificate), which was unchanged from 2021 except for the update to the income threshold above which the value of an allowance is zero.

For details on the Rhode Island Employer's Income Tax Withholding Tables, see: https://aboutbtax.com/03k.

Vermont 2022 Tax Updates

Compared to the 2021 withholding methods, the value of a state allowance increases from $4,400 to $4,500. The percentage method tax brackets have been adjusted, while the tax rates continue to range from 0 to 8.75%.

For more information, see: https://tax.vermont.gov/sites/tax/files/documents/GB-1210-2022.pdf.

Defect 1578922: The street address that you entered on the 1099-NEC tab of the Form 1099 Processing form was duplicated in the 1099-NEC work file that you generated.

Defect 1500943: In Billing, duplicate items were appearing on the Billing Backup report.

Defect 1532850: The contents of the Contract Details grid on the Contract Management form incorrectly duplicated when you did the following:

1. You selected a project that had multiple phases, or you manually created a new project and added phases to it.

2. You navigated to the Contract tab in Hubs » Projects » Contract Management, selected any WBS level on the Project Structure form, and then selected a different WBS level.

3. You selected WBS level 1 on the Project Structure form and clicked + Add Contact below the Contract Management grid.

4. You added data to the grid row and clicked Save.

5. You enabled Show Contract Totals at the bottom of the Contract Management form.

Defect 1525807: When you selected a firm from the Primary Client field on the Overview tab of the Projects form and that firm was already marked as a Vendor in the Type field on the Firms grid of the Team tab, you received an error message.

Defect 1500943: Employee expense payments for cash basis accounting were posting to a dormant account.

Defect 1567544: Comments that you added to your unit entries were not saved if you already used the same comment on a prior entry.