New Iowa W-4 for 2024
Similar to what the federal government did with their W-4 form in 2020 (see below), Iowa has revised its W-4 form for 2024.
In both cases, filling out the form completely will provide the most accurate withholding results. However, most people are not tax accountants, and the form asks questions that get detailed and confusing.
The easiest way to complete the form is to multiply the number of people in your tax household by $40 and enter that number on Line 6 of the IA W-4. Fill out the top of the form including your marital status, and sign, date, and return the form to your employer.
If the result is too much or too little withholding, ask your employer to give you a new IA W-4 and make changes. If the result is too little withholding, you can add an additional amount you want withheld from each paycheck to line 7 on the Iowa W-4. If the result is too much withholding, you can use the Iowa Withholding Estimator online and change the “amount of withholding allowances” to get to your desired Iowa withholding amount. The result is displayed in the red bar below the “Estimate Your Withholding” button.
For taxpayer households with only one job, absolutely complete the new W-4 form for your employer. The way people are taxed has changed, and the new form will more accurately reflect your real tax situation. For uncomplicated tax situations, you should end up ‘breaking even’ (small refund or small amount owed) come tax time in 2021.
For taxpayer households with more than one job, it probably makes sense to fill out a new W-4 as well. This is particularly true for households with two jobs that earn roughly the same amount of money–your withholding will be much more accurate using the new withholding system.
If one person (taxpayer or spouse) completes the new W-4, then new W-4s should be completed for all jobs in the household. This way, each job’s withholding is calculated in the new, more accurate system.
If you like the way things are working out now, you don’t need to change, unless you get a new job after 12/31/19, or you claimed exemption from income tax withholding in 2019.
Every employee could benefit by using the IRS withholding calculator. If you enter accurate information, you should get an accurate result. Iowa has a similar online tool. For more complex scenarios, consult your tax advisor.
IRS has posted a FAQ page with answers for both employees and employers. We have some thoughts for employers here.