How to Calculate the State Income Tax Withholding Rate

Report your state income tax withholding annually to the state.

State income tax applies to all states, except Alaska, Florida, Nevada, New Hampshire, South Dakota, Texas, Tennessee, Washington and Wyoming. If you work in any of those nine states, you do not have to pay state income tax. When state income tax applies, the rate varies by state. Still, there is a general way to determine your state income tax withholding rate.

Things You'll Need

• State income tax form
• State withholding tax tables

Instructions

1. Retrieve your state income tax withholding tables online or ask your employer for the rates. You may also find it on your state taxation agency’s (see Resources) website.

2. Determine your state income tax withholding conditions, such as filing status and allowances. You need this information and the state withholding tax tables to calculate your withholding rate. Your employer should have a copy of your most recent state income tax form on file; this form has your state withholding terms.

3. Calculate your state income tax withholding rate. Say you work in Rhode Island, earn $470 weekly and claim married with one allowance. The 2010 Rhode Island Employer’s Income Tax Withholding Tables notes that your weekly withholding rate would be $10.53.

Tips & Warnings

• Your employer must include your state income tax withholding for the year on your W-2 form. File the W-2 with your respective state taxation agency.

References

• IRS: States Without a State Income Tax
• Rhode Island State: 2010 Income Tax Withholding Tables

Resources

• Read this Article in Spanish
• IRS: State Revenue Sites
• Tax-Tables: State Withholding Tax Tables