How to Define Employee Deductions and Iowa State Tax Tables

When employees fill out the new 2024 W-4 for Iowa State, how to we now define the Employee Deduction record and Tax Tables?

There are changes to the standard deduction amount on the 2025 W-4 for IA state, it's now based on Marital Status, how do we enter that on the Tax Tables?

• Payroll
• Tax Tables
• Employee Deductions 
• Payroll Start and Status
• Earnings and Deductions

With the new W-4 for IA, the Standard Deduction amount is now based on a flat amount instead of number of allowances and the Allowance amount is divided by the number of pay periods. 

1. Go to Employee Deductions (Payroll>Employee Maintenance>Employee Deductions) 
2. Search for the employee and their State Tax Deduction. Click Accept. 
3. On the 2024 W-4,  the amount defined on Step 6 for Total Allowances would be defined in the, Other Income or Annual Withholding Amount field. 
   
   1. Example, step 6 on the employee's W-4 shows $1,000.00. Then $1,000.00 is defined in that field. 
      1. That amount will then be divided by the employee's number of pays during the reconciliation of the deduction in payroll. 
   2. If employees did not fill out a new 2024 or 2025 W-4, the Other Income or Annual Withholding Amount field would be $40.00 x Number of Allowances. (based on the 2025 Iowa Tax Withholding form)
4. On the 2025 Iowa Tax Withholding Form, it states the Standard Deduction is now a specified amount based on Marital Status. 
   1. Go to Tax Tables (Payroll>Payroll Setup>Income Tax Setup>Tax Tables) 
   2. Search for the 1/1/2025 effective dated State Table. If the tables for applicable year are not created yet:
   3.  click Add and define Effective Date 01/01/2025, State Code IA, Pay Period  of Annual (if using Annualized tables), and Martial Status (Single, Married and Head of Household). 
      1. Three tables will need to be added for the three Martial Statuses. 
   4. Click the Calc option in the toolbar. 
      1. Define Standard Deduction amount based on Marital Status. 2025 IA Tax Documentation notes:
         1. Single Annual Standard Deduction amount 12,000.00
         2. Head of Household Annual Standard Deduction amount 18,050.00
         3. Married Annual Standard Deduction amount 24,050.00
   5. Note - Employees that did not fill out an IA 2024 W-4 (2023 or earlier) will have two Marital Status Options of either Single or Married. The Standard deduction amount is the same as step 4.d above. 
   6. Define the Supplemental Rate. 
   7. Click Tax Table in the toolbar. 
   8. Define the applicable tax table amounts based on pay period. For year 2025 the tax documentation states, the rate is a flat 3.80% for all employees. 
      1. Define Over 0.00, But Not Over 9999999.99, +/- Amount 0.00, and +/-% 3.80. 

Reconciliation:

1. During the Reconciliation in the payroll, the system will first annualize the taxable gross. 
   1. Deduction Gross x Number of Pay Periods (Example 4,000 gross x 26 (biweekly) pays = 104,000.00 taxable gross)
2. Then it will subtract the Standard Deduction amount based on martial status.
   1. For this example, say the employee is Single so they have a Standard deduction amount of 12,000.00 (104,000.00-12,000=92,000)
3. Calculate the tax from the Tax Table.
   1. Using Annual Tax tables, take the 91,000.00 x 3.8% = 3,496.00
4. Divide by Number of Pays.
   1. 3,496/26=134.46
5. It will then calculate the Allowance Amount
   1. Allowance amount from the Other Income field divided by Number of Pays. (Using above example, the Allowance amount is 1,000. 1000/26=38.46)
6. Subtract the per-period allowance amount calculated from step 2.
   1. 134.46 - 38.46 = 96.00

2024 Iowa State Tax Tables - W-4 Change

2024 IA W-4

Iowa Withholding Income Tax Withholding Formula 2024 

Iowa Tax Withholding Information 2025

Note - If the Calc Screen does not show the new change for Standard Deduction field and still shows the over and under 80.00 fields, use: Iowa State Tax Changes 2025 to get the code change loaded into Enterprise ERP.