EmpowHR: Section 8 - ESS

Dual State Tax Voluntary Withholding

Dual State tax withholding allows employees to voluntarily elect to pay State tax in both their duty station and residence States. If State income tax is currently being withheld based on the duty station and a State tax form is entered to begin withholding for the residence State, the document will appear in suspense with an informational message indicating the document entered will result in dual State tax deductions. To release the document, type C in the Status Code field.

The Form AD-304, Request and Authorization for Allotments of Compensation for State Income Tax Purposes, serves as a certification that the employee is authorizing voluntary withholding from his/her pay and must accompany the appropriate State withholding exemption certificate. The Form AD-304 can also be used to record the voluntary State tax withholding data in cases where the State does not provide a form for the declaration of withholding.

If the Form AD-304 is used to record voluntary State tax data in lieu of a State tax certificate, the State Tax Withholding State Code, the Total Number of Allowances, and the Additional Amount (if applicable) must be indicated on the form when signed by the employee.