University employees should take time in the next week to update their state W-4 income tax withholdings form in Workday, for two reasons. First, in a multiyear plan to simplify and lower Iowa's income tax, the highest of four 2023 rates (6.0%) went away for 2024, leaving three remaining tax brackets (see chart). Also, the 2023 Legislature changed withholdings in the Iowa W-4 from an allowance number to a dollar amount to align with the method of counting in the federal W-4.
2024 Iowa personal income tax rates (most tax filing categories)
|
Gross taxable income* |
2024 (3 rates) |
2026 (1 rate) |
|
Up to $6,210 |
4.40% |
3.90% |
|
$6,211-$31,050 |
4.82% |
3.90% |
|
$31,051 and more |
5.70% |
3.90% |
*Upper and lower limits of income brackets double for married taxpayers filing a joint return
How soon should I do this?
For employees paid monthly, Jan. 25 is the deadline to update your W-4 form in time for the Jan. 31 payroll. For employees paid semi-monthly, Jan. 22 is the deadline for the Jan. 25 payroll, their second of 2024. Senior payroll manager Teri Kruse reminds employees they can update their W-4 as often as they want. The goal is to calculate adequate withholdings from 2024 paychecks to avoid a tax liability at tax time in 2025.
How to update your form
In Workday under the "pay" icon, select "withholding elections" in the actions column to make changes to either the Iowa W-4 or federal W-4. An updated knowledge base article in human resources service delivery, Payroll: How to Update Your State W-4 Withholding Elections, walks you through the form, line by line.
Note that "single" no longer is an option on the "marital status" line. The options are: married filed jointly, head of household or other (which includes single, married filing separately or qualifying surviving spouse, according to the state revenue department).
If you're uncertain about whether the university is withholding enough Iowa income tax, the Iowa Department of Revenue updated its basic withholding estimator to help individuals calculate their 2024 withholding amounts. And, as always, employees are encouraged to talk to a professional tax advisor, Kruse said. Her staff can't provide individual tax advice.
Until employees update their W-4, the state has set a default for employers to use: a $40 allowance and $0 in additional withholdings.
University employees who are residents of Illinois working in Iowa and university employees working outside of Iowa should contact the payroll team for information about their taxation.
Related story
- Lower state income tax impacts net pay, Feb. 9, 2023
