Iowa Withholding Tax Booklet And Tax Tables - 2005 Page 4
ADVERTISEMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28Iowa Department of Revenue
Find us on the Web at
If both penalties apply, the failure to file penalty takes precedence.
Interest
Interest is added to unpaid tax at a rate prescribed by law from the due date of the payment until
payment is received.
3. WHAT INCOME IS SUBJECT TO WITHHOLDING?
Wages and other employee compensation
Iowa income tax withholding is applied to the same wages and compensation to which Federal
withholding applies. 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. See IRS Publication 15, Circular E, for details.
Agricultural wages
Iowa income tax is withheld from wages paid to agricultural employees when Federal income tax
is withheld. An employer must withhold Federal income tax if more than $2,500 in wages is paid
during the year to all employees or if an individual employee has at least $150 in wages for
agricultural labor in the calendar year.
Supplemental wages
"Supplemental wages" includes a bonus, overtime pay, commission or other special payment that
is made in addition to the regular wage payment. If Federal income tax is withheld on a flat rate
basis, Iowa income tax must be withheld at the rate of 6 percent. However, if the supplemental
wage payment is included with the regular wage payment, the two are combined and the
withholding tables or formulas are used.
Nonresident wage and salaries
Employers doing business in Iowa must withhold Iowa individual income tax from the wages
and salaries of nonresident employees working in Iowa. Withholding for nonresidents is
computed the same as for residents.
Iowa-Illinois reciprocal agreement
Iowa and Illinois have a reciprocal agreement on withholding tax.
Wages earned in Illinois by an Iowa resident are subject to Iowa withholding tax. The employee
should file an Iowa W-4 and an Illinois form declaring Iowa residency (form IL-W-5) with the
Illinois employer.
Illinois residents who work in Iowa have Illinois state income tax withheld from their wages. An
employer who hires an Illinois resident to work in Iowa is required to obtain and keep on file an
Employee’s Statement of Nonresidence in Iowa (Iowa Form 44-016) to verify that Illinois tax
should be withheld instead of Iowa tax. See the ordering options on page 1.
3
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial