New Employee Withholding Certificate Policy

Most states have a state income tax in addition to the federal income tax, and in some cases, certain localities have their own income taxes on top of those. Now is a good time to check to make sure you’re up on the rules, which can often change with little notice.

For example, the Centennial State has created a new employee withholding certificate, DR 0004, for 2022. Notes the state department of revenue, “It is not meant to completely replace IRS Form W-4for Colorado withholding, but to help employees in a few specific situations fine-tune their Colorado withholding.”

The new form is not mandatory. If an employee does not fill it out, the employer calculates the Colorado income tax withholding based on Form W-4.

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