Federal Comparison

• To determine federal income tax withholding, your employer retrieves the filing status and allowances that you put on lines 3 and 5 of your W-4 form, then applies the Publication 15 tax withholding table that matches that information plus your wages and pay period. Married filing status usually puts you in a lower tax bracket than single. For example, if you claim married with one allowance on the W-4 and earn $500 weekly, according to page 40 of the 2011 Publication 15, your federal income tax withholding is $28. If you had claimed single, according to page 38 of the 2011 Publication 15, your withholding would be $51.
  
  

State Comparison

• If the state uses a system that is comparable to federal income tax withholding, then the tax withholding rules for people who are married or single are similar to federal requirements, except that you use the employee’s state withholding form and the state tax withholding tables to make the comparison. Note that the state may use a simple married/single withholding equation, or it may have different withholding calculations for married filing separately or jointly with both spouses working and married filing jointly with one spouse working. In this case, married filing status does not always put you in a lower tax bracket than single. For example, you’re an employee in Georgia and you claim married filing separately with two allowances on your G-4 form and earn $1,100 biweekly. According to the Georgia Department of Revenue Employer’s Tax Guide for 2011, your state income tax withholding is $46.28. If you had claimed single, your withholding would be $42.24. However, if you had claimed married filing jointly with one spouse working, your withholding would be $37.82.
  
  

Exception

• If state income tax is withheld at a flat percentage of wages, your filing status has nothing to do with the withholding amount. For example, in Pennsylvania, an employer withholds 3.07 percent of wages as of the date of publication. Therefore, the withholding depends on the amount of wages.
  
  

Considerations

• If you claim “married, but withhold at higher single rate” on the W-4, your employer withholds federal income tax at the single rate. If you are only comparing filing statuses, then the process is straightforward. However, if your wages and number of allowances change as well, the comparison is collectively based on wages, allowances and filing status. If an employee fails to submit a W-4, the IRS requires his employer to withhold federal income tax at single with zero allowances; this is the highest tax bracket. Many states have this requirement for state income tax as well.