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Texas Payroll/Personnel Resource

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Income Tax Withholding
State and Local Income Tax Withholding and Additional Withholding

State and Local Income Tax Withholding

State employees who live or work outside of Texas may be subject to state or local income taxes in addition to federal income taxes. Most states have state personal income taxes. Many localities also have income taxes that require withholding. For example, a Comptroller’s office employee working in the Oklahoma area is subject to Oklahoma state income tax, as well as local taxes where required.

State agencies must comply with applicable tax laws and ordinances for each state or municipality where their employees work. To do this, a state agency must establish itself as an employer with the state or local tax authority and calculate and remit taxes appropriately.

For more information on state and local taxes, contact the appropriate state or local taxing authority. Contact information for taxing authorities in a particular state is often listed on the state’s website.

Additional Withholding

State agencies and institutions of higher education must also honor an employee’s request to withhold more federal income tax than would otherwise be withheld under a given combination of income and exemptions. The extra withholding is a sum-certain amount. The employee’s request is made on a W-4 Form PDF. An amended W-4 filed by an employee must be put into effect no later than the beginning of the first payroll period ending on or after the 30th day after the form is filed with the employer.

Sources

Internal Revenue Code, Sections 3401(a), 3402(p)(3)(i)1, 3402(a)(1); Texas Government Code, Section 659.002(d); Treasury Regulations, Sections 31.3401(a)-3 (1971) and 31.3402(i)-2(a)(1) (1983); IRS Publication A; state law and local ordinances.