State withholding and the stimulus

It's always something with taxes, isn't it?

While the IRS gets kudos for so quickly revamping the federal withholding tables to align with the recently enacted American Recovery and Reinvestment Act of 2009, there are still some issues a bit up in the air.

One is in connection with state income tax withholding. This is something, as noted in my earlier post on the short-term hold put on Kansas refunds, that workers in taxpayers in 41 states and D.C. have to worry about.

In an interview with Tax Analysts, a spokesperson for the payroll service Paychex noted that additional IRS guidance would be helpful when it comes to the states that base their withholding on the federal process.

Those states, Michael Trabold told Tax Analysts, "are going to have to decide how or if they want to do anything to change that. For those impacted states, it adds an additional level of complexity."

Ah, yes, the old unintended consequences issue rears its ugly head again.

As I suggested earlier,check with your payroll manager and/or your state tax department about how this might affect your state tax withholding amount.

Off the state withholding hook: FYI, the nine states that don't tax wage income are Texas, Florida, Alaska, Nevada, New Hampshire, South Dakota, Tennessee, Washington and Wyoming.

And yes, I disrupted the alphabetical listing to put the two states where I've lived first.