January 20, 2020
State income tax withholding tables and supplemental rates for 2020
To assist you in reviewing your state income tax withholding rates for 2020, on the following pages is a chart of the most recent income tax withholding tables published by states and US territories. Reference the column "Revision date" to identify the last year the publication was updated. If the effective date shown in the chart is prior to 2020 and the last column (2020 withholding guide/tables pending?) is "no," we have confirmed with the state that no update is expected for 2020.
New this year, the chart also shows essential withholding rate information for use in evaluating the most appropriate calculation method when making nonperiodic payments to employees.
Withholding on supplemental/nonperiodic wage payments
For federal income tax withholding purposes, employers may optionally use a flat rate of 22% on supplemental wages up to $1 million for the year, provided federal income tax was withheld from regular wages in the previous or current year. If the employee's supplemental wages exceed $1 million in the year, a mandatory flat rate of 37% applies to supplemental wages over $ 1 million. This mandatory 37% rate applies even if the employee has submitted a federal Form W-4 claiming exemption from federal income tax withholding. (IRS Reg. Section 31.3402(g)-1.)
Similar to the federal supplemental income tax withholding rate, most states also allow for an optional flat percentage of income tax withholding for wages that are in addition to regular pay. Where allowed, the supplemental rate greatly simplifies income tax withholding calculations on irregular payments such as bonuses, equity compensation and separation pay.
Even if a supplemental rate of withholding is an option, employers should consider any potential impact of over- or under-withholding. For instance, consider if the supplemental withholding rate is significantly higher or lower than the withholding result using the applicable marginal withholding rate.
The state supplemental income tax withholding rates currently available for 2020 are shown in the chart below. The chart also shows if the state has a flat tax rate, meaning, only one rate of tax applies regardless of the wages paid; or alternatively, the highest marginal withholding rate according to the state's latest computer withholding formula.
2020 state tax tables and supplemental withholding rates* (as of January 15, 2020)
Changes from 2019 are highlighted in yellow.
*For 2020, there is no supplemental or flat tax rate of withholding for Arizona, Connecticut, Delaware, District of Columbia, Hawaii, Louisiana, Mississippi, New Jersey or Puerto Rico.
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