Are you an employer in West Virginia? If that’s the case, you may need heard about Home Invoice 2526, a 2023 legislation that considerably reduce particular person revenue tax charges. In consequence, your West Virginia revenue tax withholding would possibly look slightly completely different.
On this article, we’ll go over:
- What compensation is topic to withholding?
- West Virginia revenue tax updates
- What do West Virginia employers must do?
- Are there penalties for revenue tax withholding points?
What compensation is topic to withholding?
Employers are answerable for federal, state, and native payroll tax withholding. Employers who pay wages which are topic to West Virginia revenue taxes should withhold and remit the state tax.
In West Virginia, any compensation topic to federal withholding can be topic to state withholding. This contains:
- Wages
- Commissions
- Charges
- Salaries
- Bonuses
- Trip allowances
- Again pay
- Suggestions
- Retroactive wage will increase
- Remuneration for or compensation attributable to companies carried out
WV revenue tax withholding varies by worker. It relies on what number of exemptions an worker claims on Type WV IT-104, their pay frequency, and their wages. To find out state revenue tax withholding, use West Virginia’s withholding tax tables.
After withholding WV revenue tax, you need to remit the tax to the state on or earlier than the fifteenth day of the following month. And, it’s essential file quarterly returns utilizing West Virginia’s IT-101V.
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West Virginia revenue tax updates
West Virginia’s governor signed Home Invoice 2526 into legislation on March 7, 2023.
The invoice slashed particular person revenue tax charges by an common of 21.25%, making it the largest tax reduce within the state’s historical past.
What’s the new West Virginia revenue tax price?
The highest revenue tax price fell from 6.5% to five.12% and the bottom price fell from 3.0% to three.36%.
Check out the brand new revenue tax brackets for single filers, married submitting collectively, heads of households, and estates and trusts:
| Annual Earnings | 2022 Revenue Tax Brackets | 2023 Revenue Tax Brackets (NEW) |
|---|---|---|
| Not over $10,000 | 3.0% | 2.36% |
| Over $10,000 however not over $25,000 | 4.0% | $236 + 3.15% of extra over $10,000 |
| Over $25,000 however not over $40,000 | 4.50% | $708.50 + 3.54% of extra over $25,000 |
| Over $40,000 however not over $60,000 | 6.0% | $1,239.50 + 4.72% of extra over $40,000 |
| Over $60,000 | 6.50% | $2,183.50 + 5.12% of extra over $60,000 |
Listed here are the brand new revenue tax brackets for people who’re married submitting individually:
| Annual Earnings | 2022 Revenue Tax Brackets | 2023 Revenue Tax Brackets (NEW) |
|---|---|---|
| Not over $5,000 | 3.0% | 2.36% |
| Over $5,000 however not over $12,500 | 4.0% | $118 + 3.15% of extra over $5,000 |
| Over $12,500 however not over $20,000 | 4.50% | $354.25 + 3.54% of extra over $12,500 |
| Over $20,000 however not over $30,000 | 6.0% | $619.75 + 4.72% of extra over $20,000 |
| Over $30,000 | 6.50% | $1,091.75 + 5.12% of extra over $30,000 |
Heads up, employers! Due to the decreased particular person revenue tax charges, West Virginia launched new tax withholding tables for payroll tax withholding. In the event you do payroll by hand, view the brand new proportion technique or desk technique revisions. In the event you use on-line payroll software program, your system ought to routinely replace the charges for you.
When does the brand new WV state revenue tax price take impact?
The decreased WV state revenue tax charges are retroactive to January 1, 2023.
Did WV’s supplemental tax price change?
Like nearly all of states, West Virginia has a state supplemental tax price. Employers can withhold this price from supplemental wages rather than commonplace state revenue tax withholding. Supplemental wages embody bonuses, commissions, again pay, and paid break day payouts.
Home Invoice 2526 lowered West Virginia’s supplemental revenue tax charges. The speed you employ relies on the worker’s gross wage.
Use the next chart to match West Virginia’s 2023 supplemental tax charges and 2022 charges:
| Annual Earnings | 2022 Supplemental Tax Charges | 2023 Supplemental Tax Charges (NEW) |
|---|---|---|
| Not over $10,000 | 3.0% | 2.36% |
| Over $10,000 however not over $25,000 | 4.0% | 3.15% |
| Over $25,000 however not over $40,000 | 4.50% | 3.54% |
| Over $40,000 however not over $60,000 | 6.0% | 4.72% |
| Over $60,000 | 6.50% | 5.12% |
West Virginia’s supplemental tax charges are additionally retroactive to January 1, 2023.
What do employers must do concerning the new charges?
Employers are answerable for updating their payroll withholding in response to the decreased West Virginia revenue tax charges.
Once more, you need to use one of many following revised withholding tables in the event you do payroll by hand:
Though the brand new particular person revenue tax charges are retroactive to January 1, 2023, you don’t want to regulate prior paychecks. As an alternative, staff will obtain the distinction once they file their 2023 annual revenue tax return in 2024.
For extra data, head to West Virginia’s web site.
Are there penalties for revenue tax withholding points?
Sure, there are penalties for failing to withhold and remit the right amount of state revenue taxes. Penalties embody curiosity and “additions to tax.”
Employers who fail to remit withheld taxes by the due date of the return could also be topic to curiosity. In accordance with the state, the rate of interest can change, however it’s by no means lower than 8%.
West Virginia imposes additions to tax in the event you don’t file a return by the due date. The penalty quantity ranges from 5% – 25% of the tax due per 30 days.
The state additionally imposes additions to tax in the event you fail to pay due taxes on a return by the due date. The penalty quantity ranges from 0.5% – 25% of the tax due per 30 days.
In the event you’re topic to each additions to tax penalties, West Virginia units a most month-to-month penalty of 5%, to not exceed 50% of taxes due.
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