Reminder: Review W-4 form for state tax withholding

As first shared last winter in Inside, the Iowa income tax withholding formula and the state W-4 were revised for tax year 2025 to reflect changes signed into law in May 2024 designed to simplify the withholding process. Making sure the right amount of tax is being taken out of a paycheck each month could keep employees from writing a check later.

"There is still plenty of time to make an impact whether an employee owes, is getting a refund or breaking even," said senior payroll manager Melissa Brown.

State tax withholding

For 2025, Iowa transitioned to a flat personal income tax, enacted through Senate File 2442. The legislation replaced the previous graduated tax bracket system.

If needed, employees may update their Iowa W-4 form in Workday (select "Benefits and Pay," then "Withholding Elections" and "State Elections"). Employees may complete a new Iowa W-4 as often as needed; instructions are in a knowledge base article. Complete your calculations first; once you click "update," the previous tax elections are gone.

Brown said it is a good practice for employees to review their payslip monthly for accuracy, looking at tax and benefit information.

Federal tax withholding

The Internal Revenue Service (IRS) has a withholding estimator to help employees calculate their federal tax withholdings. The tool:

•  Estimates federal income tax withholding
• Shows how a refund, take-home pay or tax are affected by the withholding amount
• Helps determine the withholding amount that works for the employee

The estimator requires payslip information for all jobs (and those of a spouse), income information for side jobs, self-employment, investments, etc. and your most recent tax return. The estimator is as accurate as the information provided, and no financial information is saved in it. Employees can find their payslips in Workday under the "pay" icon.

Questions about filling out a W-4 form can be directed to payroll@iastate.edu or call 294-6556. Employees are encouraged to talk to a professional tax advisor about adjusting their withholdings, Brown said.