Federal Income Tax Withholding 2024 Updates

The updates for federal income tax withholding are 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 $8,650 to $9,550.

• 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 $12,950 to $13,850.

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

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 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.

For more information, see the Montana Employer and Information Agent Guide: https://mtrevenue.gov/wp-content/uploads/dlm_uploads/2023/11/Employer_and_Information_Agent_Guide.pdf

Nebraska 2024 Tax Updates

The updates for Nebraska are effective January 1, 2024:

• The annual state allowance increases from $2,140 to $2,250.

• The annual one income tax withholding allowance is $2,250.

  • If this calculation is less than 1.5% of the taxable wage amount, adjust the income tax withholding to be at least 50% or more of the income tax withholding for a single employee with one income tax withholding allowance, or for a married employee with two allowances. These amounts meet the minimum income tax withholding requirement and may be used by the employer to determine an acceptable employee’s state income tax withholding amount.   

• The percentage method tables have been updated.

  • To use the percentage method, start with the taxable wage amount for the payroll period. Subtract the value of any income tax withholding allowances. Deduct the result from the taxable wages before using the percentage method tables. 

• Nebraska Income Tax Withholding Percentage Method Tables (for wages paid on or after January 1, 2024.) The appropriate income tax withholding allowance value must first be subtracted from the wage amounts before using these tables.           

For more information, see the 2024 Nebraska Circular EN: https://revenue.nebraska.gov/sites/revenue.nebraska.gov/files/doc/business/Cir_En_2023/2024cir_en_whole.pdf

New New Mexico 2024 Tax Update

Effective January 1, 2024, the tax brackets have been adjusted. To use the Withholding Tax Tables, determine the amount to withhold from the appropriate tax tables, based on the payroll period and the employee’s filing status.

North Carolina 2024 Tax Updates

The updates for North Carolina are effective January 1, 2024:

Tax Table Updates

• The rate used for withholding decreases from 4.85% to 4.6%.

• The supplemental tax rate decreases from 4.85% to 4.6%.

For more information, see the 2024 Income tax Withholding Tables and Instructions for Employers: https://www.ncdor.gov/tax-forms/2024-nc-30/open

SUTA Electronic Filing 

There are new and updated file formats to be used in the new system (NCSUITS) beginning in Q4. NCSUITS (North Carolina State Unemployment Insurance Tax System) is a new, modernized system to administer North Carolina’s unemployment insurance tax program.

• If you choose to upload wage files, you can now use one of three file formats – ICESA, EWF2, or CSV (comma-separated values) – to upload wage files and make online payments.

• The Wage File Upload feature in NCSUITS confirms and processes the incoming file, calculates taxes and other amounts due, and creates a confirmation number. With that confirmation number, you can submit online payments. Agents can submit payments for multiple clients through the Manual Payment Allocation feature or by uploading a payment allocation file.

• The ICESA format is changing. ICESA file(s) should have a file extension of .txt and a record length of 275.

  • Only one record type ‘A’ in the file. The ‘A’ record will contain information about who is submitting the file.

  • Only one record type ‘E’ in the file.  The ‘E’ record should contain information about the employer for whom the report is being submitted. The Employer ID and FEIN in the file must match the Employer ID and FEIN on the account logged into when uploading the file.

  • Multiple type ‘S’ records in the file that contain SSN for employee(s), names and wages for the reporting quarter. (One record per employee)

  • Only one record type ‘T’ in the file. The ‘T’ record should contain the totals for all record type ‘S’ records reported for the employer.

  • Only one record type ‘F’ in the file. The ‘F’ record shows the end of the file and must be the last data record on each file submitted.

• The EFW2 is the former MMREF format with changes. EFW2 file should have a file extension of .efw and a records length of 512.

  • Only one record type ‘RA’ in the file. The ‘RA’ record will contain information about who is submitting the file.

  • Only one record type ‘RE’ in the file.  The ‘RE’ record should contain information about the employer for whom the report is being submitted. The Employer ID and FEIN in the file must match the Employer ID and FEIN on the account logged into when uploading the file.

  • Multiple type ‘RW’ records in the file that contain SSN for employee(s), names and wages for the reporting quarter.  (One record per employee)

  • Only one record type ‘RT’ record in the file. The ‘RT’ record should contain the totals for all record type ‘S’ records reported for the employer.

  • Only one record type ‘RF’ in the file. The ‘RF’ shows the end of the file and must be the last data record on each file submitted.

• The CSV format is a new file format used to transmit the Quarterly Tax and Wage report. The CSV file should have a file extension of .csv, and you should make sure that all defined columns are populated. 

  • The order of the records should be type 0, type 1, type 2, type 3.

  • You can create the CSV file using commercially available spreadsheet software (for example, Microsoft Excel). 

  • Employers can file original or amended wage reports in this file format; however, each file should contain only information for one quarter.

• DES format will no longer be accepted once NCSUITS is launched.

• Agents and employers should begin using NCSUITS on November 13, and use it to file reports for the 4th Quarter that are due on Jan. 31, 2024. 

For more information, see the Employer’s Guide to Wage Report and Payment File Specifications guidance document: https://www.des.nc.gov/documents/files/suits-wage-report-and-payment-file-specification/open

Oklahoma 2024 Tax Updates

The updates for Oklahoma are effective January 1, 2024:

• The value of the state allowance remains $1,000.

• The top tax bracket increases for married employees.

Rhode Island 2024 Tax Updates

The updates for Rhode Island are effective January 1, 2024:

• The brackets used in the percentage method have been adjusted.

• The annual wage threshold above which the state allowance is zero increases from $260,550 to $274,650.

For more information, see the Rhode Island Employer’s Income Tax Withholding Tables: https://tax.ri.gov/sites/g/files/xkgbur541/files/2023-12/2024%20Withholding%20Tax%20Booklet.pdf

Vermont 2024 Tax Updates

The updates for Vermont are effective January 1, 2024:

• The state allowance increases from $4,850 to $5,100.

• The tax brackets used in the percentage method have been adjusted.

For more information, see the Vermont 2024 Income Tax Withholding Instructions, Tables, and Charts: https://tax.vermont.gov/sites/tax/files/documents/GB-1210-2024.pdf

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