22 January 2019 Oklahoma 2019 income tax withholding tables available; 2018 Forms W–2 filing reminders The Oklahoma State Tax Commission (OTC) released the state income tax withholding tables for tax year 2019. The 2019 annual percentage method is unchanged from 2018 and the annual withholding allowance amount remains at $1,000. (Packet OW–2, 2019 Oklahoma Income Tax Withholding Tables, December 2018.) Under legislation enacted in April 2018, the due date for filing Forms W–2 with the OTC is changed from February 28 to January 31 effective with tax year 2018 (due by January 31, 2019). (HB 3156 ; Tax Alert 2018–1068) Also, in April 2018, the OTC released a new state withholding allowance certificate, Form OK–W–4, Employee's Withholding Allowance Certificate, in response to federal changes under the Tax Cut and Jobs Act (TCJA). The new form should be used by new employees and any employee that wishes to make changes to their Oklahoma state income tax withholding. Use of the federal Form W–4 for Oklahoma state income tax withholding purposes is no longer allowed. (Informational notice, April 4, 2018; Oklahoma Tax Commission Rule Section 710:90–1–5, revised April 18, 2018; Tax Alert 2018–0777) As we previously reported, 2017 legislation (SB 170) repealed a statutory provision that would have eventually decreased the top personal income tax rate to 4.85% if a certain revenue target was reached. As a result and effective November 1, 2017, the maximum income tax rate remains at 5.0%. (Tax Alert 2017–1000) Legislation enacted in 2014 would have gradually lowered Oklahoma's top income tax rate to 4.85% over several years. SB 1246 reduced the top personal income tax rate from 5.25% to 5.0% in tax year 2016 because the general revenue target was reached. As we previously reported, the OTC requires that employees hired after February 28, 2018 submit to their employers a new state withholding allowance certificate, Form OK–W–4, Employee's Withholding Allowance Certificate. Form OK–W–4 was created in response to federal changes under the Tax Cut and Jobs Act (TCJA). The new form must also be used by any employee that wishes to make changes to their Oklahoma state income tax withholding. Use of the federal Form W–4 for Oklahoma state income tax withholding purposes is no longer allowed. (Informational notice, April 4, 2018; Oklahoma Tax Commission Rule Section 710:90–1–5, revised April 18, 2018; Tax Alert 2018–0777) Employees that submitted federal Form W–4 to their employer prior to March 1, 2018, are not required to submit the new Form OK–W–4 unless changes need to be made. For more information on Oklahoma state income tax withholding, see the OTC website. Other 2017 legislation (HB 2348) unties the state standard deduction amounts from the limits established and adjusted annually by the IRS. Beginning tax year 2017, and all future tax years, the following standard deduction amounts apply (2018 legislative update) :
The supplemental rate of income tax withholding continues at 5.0% for 2019, the highest applicable rate. Treatment of supplemental wages combined with regular wages. An employer who pays supplemental wages combined with regular wages and does not specify or separate the amount of each should withhold income tax as if the total payment were a single payment for a regular payroll period. Supplemental wages include bonuses, commissions, overtime pay, vacation pay, sick leave pay, back pay, retroactive wage increases or payment for nondeductible moving expenses.
If the employer withholds tax from the regular wages, use one of these two methods for supplemental wages:
If tax was not withheld from an employee's regular wages, the provisions in (1)(B) above should be used. This situation would occur, for example, when the value of the employee's withholding allowances claimed is more than the wages.
Under legislation enacted in April 2018, the due date for filing Forms W–2 with the OTC is changed from February 28 to January 31 effective with tax year 2018 (due by January 31, 2019). (HB 3156 ; Tax Alert 2018–1068) Employers or their payroll providers are required to use Oklahoma Taxpayer Access Point (OKTap) to either upload files or manually enter the information directly into OkTAP using a modified EFW2 format. Paper forms and magnetic/optical media (i.e., flash drives, diskettes, CDs) and Form G–141, OTC – Transmittal of Magnetic Media Tax Return will not be accepted. Those that are received will be shredded and considered not filed. Penalties may apply. See the OTC's W–2 and W–3 FAQs for more information. Employers unable to meet the January 31, 2019 deadline or who have questions should contact the OTC at +1 405 521 3160 or by email to W2ExtensionRequest@tax.ok.gov. Forms 1099 must also be filed electronically with the OTC, unless the payer is participating in the Federal Combined Fed/State program. See the OTC's 1099 FAQs for more information.
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