Iowa Withholding Tax Booklet And Tax Tables - 2005 Page 11
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28Iowa Department of Revenue
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Credit Amounts
3rd and Each
1st Personal
2nd Personal
Subsequent Personal
Pay Period
allowance
allowance
allowance
Weekly
$0.77
$0.77
$0.77
Biweekly
$1.54
$1.54
$1.54
Semimonthly
$1.67
$1.67
$1.67
Monthly
$3.33
$3.33
$3.33
Annually
$40.00
$40.00
$40.00
Formula Examples and Instructions
Round all amounts to the nearest whole dollar
DEFINITIONS OF VARIABLES
G=Taxable Wages for Pay Period
R=Iowa Tax Rates
W=Federal Tax Withheld for Pay Period
C=Personal Allowance Credit
S=Standard Deduction
P=Number of Pay Periods
A=Additional Withholding Requested
N=Number of Personal Allowances
INSTRUCTIONS FOR REGULAR FORMULA
Items T 1 through T 4 represent the values derived at each step in arriving at the tax
to be withheld. Be sure to use the values for the correct pay period.
Subtract federal withholding from taxable wages. Certain payments made by the
employer into employee retirement plans or for employee heath insurance are not
considered wages and are not included in the calculations of withholding tax.
T 1 = G - W
Subtract the standard deduction from T 1
T 2 = T 1 - S
Multiply T 2 (taxable income) by the tax rates (1)
T 3 = T 2 x R
Subtract the personal allowance credits from the gross tax to arrive at final tax
liability
T 4 = T 3 – [ C x N ]
Add the additional amount of withholding requested on the employee’s IA W4
T 5 = T 3 + [ A ÷ P ]
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