Tax News Update    Email this document    Print this document  

For the first time since July 2014, the Georgia Department of Revenue recently released an updated Form G-4, Georgia Employee's Withholding Allowance Certificate.

According to the form's instructions, Georgia law (O.C.G.A. Section 48-7-102) requires employees to complete and submit Form G-4 to their employers in order to have the correct state income tax withheld. Failure to submit a completed Form G-4 will result in the employer withholding income tax as though the employee were single with zero allowances.

However, the 2019 Georgia employer tax guide (page 13) continues to state:

Employers can use the federal election to determine state income tax withholding if sufficient information is available to do so. Otherwise, employers should withhold as if the employee were single with zero allowances. O.C.G.A. Section  48-7-102

Likewise, Georgia O.C.G.A. Section  48-7-102 states:

(2) Except as otherwise provided by rules or regulations of the commissioner, if an employee has filed with his employer an exemption certificate as required for federal withholding tax purposes, an employer may give effect to the exemption status and exemptions claimed on the federal exemption certificate when the certificate contains sufficient information to enable the employer to give effect to the withholding exemptions allowable under this Code section.

In light of the changes under the federal Tax Cuts and Jobs Act of 2018 (TCJA), and the possibility of under-withholding of state income tax, Georgia employers may want to provide Form G-4 to their employees and recommend that they submit this form in addition to federal Form W-4.

Employers must submit certain Forms G-4 to the Department

Employers are instructed to submit Forms G-4 claiming exempt from withholding or more than 14 allowances to the Department's Taxpayer Services Division, P. O. Box 105499, Atlanta, Georgia 30359.

The Department will notify the employer if the Form G-4 should not be honored (otherwise, no reply will be issued). The employer should honor the employee's G-4 claiming exempt from withholding or more than 14 allowances unless notified to not do so by the Department.

Withholding tables released for 2019

As we previously reported, the Department released revised 2019 income tax withholding wage-bracket and percentage method tables that are effective with wages paid on and after January 1, 2019.(EY Payroll Newsflashes Vol. 19, #195, 12-4-2018; #195, 12-4-2018.)

The maximum Georgia income tax rate is temporarily reduced to 5.75%, down from 6.0%. (EY Payroll Newsflashes Vol. 19, #069, 4-5-2018; #195, 12-4-2018.)

Supplemental withholding rates for 2019?

The supplemental withholding rates on bonuses and other supplemental compensation are as follows (O.C.G.A. Section  48-7-101(f) (5)):

Under $8000 … … … … . … … … … … … … …. … … .2%

$8000-$10,000 … … … … … … … … … … … … . … …3%

$10,001-$12,000 … … … … … … … … … … … . … … 4%

$12,001-$15,000 … … … . … … … … … … … .. … . …5%

Over $15,000 … … … … … … … … … … … … … … … 5.75% (down from 6.0%)

Legislation temporarily reduces corporate and individual income tax rates

2018 HB 918 temporarily reduces both the corporate and the highest individual income tax rates. Applicable to tax years beginning on or after January 1, 2019, the corporate income tax rate and the highest individual income tax rate, both previously 6%, decrease to 5.75%.

Applicable to tax years beginning on or after January 1, 2020, the corporate and the highest individual income tax rates further decrease to 5.5%, if the legislature approves, and the governor signs, a joint resolution ratifying this additional rate reduction.

These reductions are temporary and will sunset on December 31, 2025. On January 1, 2026, the corporate and the highest individual income tax rates will revert back to the 6% rate — the rate in effect on the day before the law was enacted.

For more information on Georgia withholding taxes, see the Department's website.

———————————————

———————————————
ATTACHMENT

EY Payroll News Flash