Department of Revenue issues new withholding tax tables

DES MOINES — The Iowa Department of Revenue is issuing updated income tax withholding formulas and tables for 2024.

The Department updates withholding formulas and tables when necessary to account for inflation and for changes in individual income tax liability resulting from changes in Iowa law.

The Iowa withholding formula and the IA W-4 have been revised for 2024 to accommodate certain changes enacted by the Iowa Legislature in 2023 under Senate File 565.

The bill replaced "number of allowances" with "amount of allowances" in line with federal withholding.

Businesses should encourage their employees to file an updated Iowa W-4 using the 2024 IA W-4 form, the Department of Revenue said in a news release.

For employees who do not file an updated W-4 using the 2024 IA W-4 form, employers should use $40 as the total allowance amount and $0 as the additional withholding amount when calculating these employees' Iowa withholding amounts.

Employers can view the Iowa 2024 withholding formulas and tables online.

The Department has updated the online withholding estimator to help individuals calculate their 2024 withholding amounts. Employers must update withholding amounts starting Jan. 1, 2024, but employees can also make changes to their Iowa W-4 (withholding) form by contacting their employers.

Employers with questions can contact the Department at 515-281-3114 or 800-367-3388.