January 4, 2022 2022 state income tax and supplemental withholding rates (preliminary as of January 5, 2022) To assist you in reviewing your state income tax withholding rates for 2022, below is a chart of the most recent income tax withholding tables published by states and US territories and the supplemental withholding rate if allowed. Supplemental withholding rate Like the federal supplemental income tax withholding rate, states/territories may 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. Employers may optionally use a federal flat rate of income tax federal withholding of 22% on supplemental wages up to $1 million for the year; however, a mandatory flat rate of 37% applies to supplemental wages over $1 million. Note that the flat 37% rate applies even if an employee has submitted a federal Form W-4 claiming exemption from federal income tax withholding. (IRS Reg. Section 31.3402(g)-1.) The state supplemental income tax withholding rates currently available for 2022 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. Changes in tax rates from December 31, 2021 are highlighted in yellow in the attached PDF.
Legend *See notes below. _________________________________________________________________________________________________ Alabama The supplemental withholding rate is 5%. (Withholding Tax Tables and Instructions for Employers and Withholding Agents, p. 3.) Arizona Effective January 1, 2021, the highest marginal tax rate is 4.5% plus a 3.5% surcharge on income exceeding $250,000 ($500,000 for married and head of household). (Arizona Rev. Stat. Ann. 43-1011.) Under SB 1828 and effective January 1, 2022, the law createsa two-tier individual income tax rate structure of 2.55% and 2.98% depending on filing status and taxable income and, if general fund revenue thresholds are met, a reduced two-tier individual income tax rate structure of 2.53% and 2.75% or a 2.5% tax rate beginning in 2023. Arkansas The supplemental withholding rate is 5.9%. (Arkansas Department of Finance and Administration, Withholding Tax. p. 4.) California The supplemental withholding rate is 10.23% on bonuses and stock options and 6.6% on other types of compensation (e.g., overtime pay, commissions, sales awards, and vacation pay). (2022 California Employer's Guide, p. 15.) Connecticut There is no supplemental rate of withholding. (Connecticut Employer's Tax Guide, p. 12.) Idaho The supplemental rate of withholding is 6.5%. (Idaho State Tax Commission, Computing Withholding.) Iowa The supplemental rate of withholding is 6%. (Iowa Withholding Tax Information.) Kansas The supplemental rate of withholding is 5.0%. (Kansas Withholding Tax Guide, p.8.) Maine The supplemental rate of withholding is 5.0%. (Maine Withholding Tables for Individual Income Tax, p.4.) Maryland Under SB 133 and effective in 2022, each county is authorized to set by ordinance or resolution, a county income tax rate equal to at least 2.25% (previously, 1%) and to apply the county income tax on a bracket basis. A county that imposes the tax on a bracket basis: (1) must set, by ordinance or resolution, the income brackets that apply to each income tax rate; (2) may set income brackets that differ from the income brackets to which the state income tax applies; (3) may not set a minimum income tax rate less than 2.25% of an individual's Maryland taxable income; and (4) may not apply an income tax rate to a higher income bracket that is less than the income tax rate applied to a lower income bracket. The legislature overrode the governor's veto on December 6, 2021. Minnesota The supplemental rate of withholding is 6.25%. (Minnesota Income Tax Withholding, Instruction Booklet and Tax Tables, p.7.) Missouri The supplemental rate of withholding is 5.3%. (2022 Missouri Withholding Tax Formula, p.1.) Montana The highest withholding rate is 6.6% and the supplemental rate of withholding is 6%. (Withholding Tax Guide with Montana Withholding Tax Tables, p.2.) Under SB 159, and effective January 1, 2022, the top marginal income tax rate is reduced from 6.9% to 6.75%. Nebraska The supplemental withholding rate is 5%. (2022 Nebraska Circular EN, p.9.) New York If you pay supplemental wages (bonuses, commissions, overtime pay, sales awards, etc.) with regular wages but do not specify the amount of each, withhold income tax as if the total were a single payment for a regular payroll period. If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the income tax withholding method depends partly on whether you withhold income tax from your employee's regular wages:
New Mexico The supplemental withholding rate is 5.9%. (FYI-104, New Mexico Withholding Tax, p.4.) North Dakota The supplemental withholding rate is 1.84%. (2022 North Dakota Income Tax Withholding Rates & Instructions, p.58.) Ohio The supplemental withholding rate is 3.5%. (Ohio Administrative Code 5703-7-10, rev. 11-23-2018.) The Ohio Department of Taxation (DOT) has released the 2022 Ohio Employer and School District Withholding Tax Filing Guidelines and the School District Income Tax Rates for 2022. Oklahoma The supplemental withholding rate is the highest withholding rate. (Okla. Admin. Code Section 710:90-1-6.) Oregon The supplemental withholding rate is 8%. (Oregon Withholding Tax Formulas, p.3.) Rhode Island The supplemental withholding rate is 5.99%. (Rhode Island Employer's Income Tax Withholding Tables, p.6.) Vermont The supplemental withholding rate is 30% of federal income tax withheld. (Vermont Income Tax Withholding Instructions, Tables and Charts, p.3.) Virginia The supplemental withholding rate is 5.75%. (Virginia Income Tax Withholding Guide For Employers, p.10.) Wisconsin The supplemental withholding method is explained in the Wisconsin Withholding Tax Guide, p.24. ———————————————
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