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RyanR

Employee Witholding - Federal vs State

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I am processing payroll for employees in Colorado. When inputting the withholding information for new employees, I reference what has been provided on the employee’s W-4. Should I be marking the same withholding for the State line? Or should I just be using the federal line since the form W-4 is for federal taxes only? For example, if an employee is Married filing jointly and has 1 dependent, I would put 2000 under the dependent column on the Federal row only. Would I do the same for State row below that or leave that alone?

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    Hi Ryanr,

    Whether or not a state accepts a federal W4 varies from state to state, some do others do not.  In Sage 50, only the federal withholding line accommodates the new W4 formats (i.e. amounts rather than exemptions).  So if you do decide to go with the federal W4 as a guideline, you would put a 1 in the exemption field as the amount field will not be available for the state line.

    Thank you.

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