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KENN015
New Member

Why the state tax withholding is bigger than the federal tax withholding?

I moved to Kentucky from Ohio last year. Since then, the monthly federal tax withholding is smaller than the state tax withholding. I am concerned that I will need to make payment for the federal tax when reporting my tax return next year. 

 

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1 Reply
mfields2
Expert Alumni

Why the state tax withholding is bigger than the federal tax withholding?

While it is hard to know the particulars of your paycheck, here are some general observations that may apply:

 

If your income is low, it is highly possible that the state tax rate is higher than the federal tax rate, due to the federal tax standard deduction that is much higher than the state standard deduction.  

 

It is also possible that federal credits (the number of dependents you claim) are wiping out your federal tax liability on the withholding tables, and thus you have low federal income tax withholding.

 

It is possible your payroll department screwed up and you should be withholding at a higher amount than you are.  I would look at your 2021 tax return and do a quick math problem:  What is Line 24 (total tax) / Line 11 (Adjusted Gross income).  So if your total tax was $2,500 and your adjusted gross income was $30,000, you would have $2,500/$30,000 = 8.34% - is your federal withholding rate at least this much?  That is a good starting point.

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