State Tax Withholding

The state-level equivalent of the federal W-4: employees use it to set state, and sometimes local, income tax withholding. Which form you need depends entirely on where the employee works.

See the Step-by-Step ProcessState Form Reference
What An employee-completed form that tells you how much state income tax to withhold from each paycheck. The specific form, and whether one is required at all, depends on the state where the employee works.
Who All employers with employees working in states that impose a state income tax. Nine states have no state income tax and require no state withholding form (see Special Cases below).
When Collect at hire; update when an employee submits a revised form or moves to a new work state.
Risk There is no single federal penalty for state withholding form errors; each state sets its own rules. The general exposure is employer liability for state income taxes that should have been withheld and weren't, plus state-specific failure-to-withhold penalties and interest. For employers with employees in multiple states, the risk applies independently in each state where you operate.
Hire
New hire form

Apply with the first payroll you can, typically the next payroll run.

Move
New work state

Collect the new state's form and update payroll; check reciprocity first.

Jan
Annual review

Confirm the current form version for each state before the new year's first run.

Trigger Due Date / Window Notes
New hire: state form received Apply with the first payroll you can (typically the next payroll run) Confirm whether the state requires its own form or accepts the federal W-4. If no form is on file, apply the state's default withholding rate.
Employee submits an updated form As soon as administratively practicable; no later than the start of the next payroll period Most payroll systems apply it on the next run.
Employee moves or begins working in a new state Promptly after the move or work-location change Withholding follows the state where work is performed. Collect the new state's form and update payroll. Check for reciprocity agreements before switching.
Annual form review Each January States update their withholding forms and tax tables annually. Confirm you have the current version for each state where you have employees before the new year's first payroll run.
Trigger: New hire: state form received
Window: Apply with the first payroll you can
Notes: Confirm whether the state needs its own form. No form on file: apply the state default.
Trigger: Employee submits an updated form
Window: By the start of the next payroll period
Notes: Most payroll systems apply it on the next run.
Trigger: Employee moves or works in a new state
Window: Promptly after the change
Notes: Withholding follows the work state. Check reciprocity before switching.
Trigger: Annual form review
Window: Each January
Notes: Confirm the current version for each state before the first run.
  • Current state withholding form for each work state: Download directly from the state's department of revenue or department of taxation website. See the green section below for a state-by-state reference chart.
  • Employee details to verify: Legal name, SSN (or state ID where required), filing status, allowances or adjustments, signature, and date. Return incomplete forms before entering them in payroll.
  • Payroll system access: To enter or update state withholding settings and confirm the correct state and local tax tables are loaded for the current year.
  • Local withholding forms (if applicable): Some cities and localities, particularly in Pennsylvania, Ohio, Kentucky, Maryland, and New York, require their own withholding forms or registration in addition to the state form. Check the local tax authority for each work location.
1
Identify the correct form for the employee's work stateCheck whether the state requires its own form, accepts the federal W-4, or has no income tax. Use the reference chart in the green section below.
2
Provide the form at hireInclude it in your onboarding packet or e-onboarding portal alongside the federal W-4. For employees in multiple states, provide the applicable form for each state.
3
Review for completenessConfirm filing status, applicable adjustments, signature, and date. Return any incomplete form before entering it in payroll.
4
Enter in payrollUpdate state withholding settings and confirm the correct 2026 state tax tables are loaded. For states with local taxes, enter the locality code as well.
5
Retain the form securelyPaper or electronic, and note the date it was received and applied.
6
Review each JanuaryConfirm the form version is still current for each state where you have employees, and prompt any employees who have had life or job changes to submit updates.
  • Retention: Keep each form for at least 4 years after the date the related tax was due or paid, whichever is later. Some states require longer retention; check your state's rules if you operate in multiple states.
  • Format: Paper or electronic storage is acceptable. Electronic systems must include secure access and an audit trail.
  • State audit requests: State tax agencies may request withholding forms during a payroll audit. Have a retrieval process ready for each state where you have employees.
  • Privacy: Treat state withholding forms as confidential payroll and tax records. Limit access to payroll and HR staff who need it.
  • Signed state formsCurrent signed form for every active employee in each income-tax state, plus prior versions if updated mid-year.
  • Payroll change logWhen each new form was received and when the updated settings were applied.
  • State correspondenceAny state correspondence adjusting withholding obligations, and your implementation timeline in response.
  • Multi-state recordFor employees working across multiple states: which state's form was collected, when, and which work-state withholding rules applied at each point in time.

Common traps

Assuming the federal W-4 covers state withholding: This is only true for states that explicitly accept the federal form. Many states require their own form with different filing status categories, allowance structures, or additional fields. Using the federal W-4 in a state that requires its own form means you may be calculating state withholding incorrectly from day one.
Using last year's state form: States update their withholding forms and tax tables annually. An outdated form can result in incorrect withholding amounts, both for the employee's liability and your obligations. Confirm the current version for each state each January before the first payroll run.

FAQs

Do all states require a withholding form?
No. Nine states have no state income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming) and require no state withholding form. Among the remaining states, some require their own form, and some accept the federal W-4. See the green section below for a state-by-state reference.

What if an employee lives in one state but works in another?
In general, withholding follows the state where the work is performed, not where the employee lives. However, many neighboring states have reciprocity agreements that allow you to withhold only for the employee's home state. Check whether a reciprocity agreement exists between the two states before deciding which state's form to collect and which withholding to apply.

What about cities and localities with their own income tax?
Certain localities, particularly cities in Pennsylvania, Ohio, Kentucky, Maryland, and New York City, impose their own income tax with separate withholding requirements. Check the local tax authority for each work location. Your payroll system will need the correct locality tax code entered to calculate and remit local withholding correctly.

What if an employee moves mid-year?
Have the employee complete a new state withholding form for their new work state and update payroll for the next payroll run. If they moved to a no-income-tax state, discontinue state withholding for that employee from that point forward.

  • States with no income tax (no form required): Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Employees working in these states require no state withholding form and no state income tax withholding, though local taxes may still apply (e.g., Washington has no state income tax but some localities have other payroll taxes).
  • States with reciprocity agreements: Many neighboring state pairs allow employees to pay income tax only in their home state rather than their work state. Examples include Virginia/DC/Maryland/Pennsylvania, Michigan and several surrounding states, and Wisconsin and Illinois. Keep any required reciprocity or nonresident exemption certificates on file. The agreements vary in scope; confirm the current terms for each state pair.
  • States with unique form structures: Some state forms use allowances (like the pre-2020 federal W-4), others mirror the current federal W-4 format, and a few use entirely different worksheets. Follow the instructions for each state's form; do not assume it works the same way as the federal W-4.
  • Remote workforce: An employee working from home in another state generally creates a withholding obligation in that state. Confirm whether you are registered to withhold in each state where remote employees work; you may need to register with that state's tax agency before you can withhold and remit.
  • Local income taxes: Pennsylvania, Ohio, and Kentucky each have hundreds of local taxing jurisdictions. New York City and Yonkers have their own income taxes layered on top of New York State. Maryland county taxes are included in the state withholding system but require the correct county code. Ensure your payroll system is set up with the correct locality codes for every work location.

Use the chart below to find the current form for any state, then go directly to that state's tax agency website to download the official current version. Forms change annually; always verify before the new year's first payroll.

Once you find the current form for each state where you have employees, download it directly from that state's department of revenue or department of taxation website; that is the authoritative source and the version that will be accepted during a state payroll audit.