Urgent Alert for Businesses: Avoid Penalties, Stay Compliant with New Corporate Transparency Act
BOZEMAN OFFICE 406-582-8822 HELENA OFFICE 406-449-4829
Urgent Alert for Businesses: Avoid Penalties, Stay Compliant with New Corporate Transparency Act


At Tax Time, Don't Forget the States!

Posted on January 28th, 2022

Most states have a state income tax in addition to the federal income tax, and in some cases, certain localities have their own income taxes on top of those. Now is a good time to check to make sure you’re up on the rules, which can often change with little notice.

New policy in Colorado

For example, the Centennial State has created a new employee withholding certificate, DR 0004, for 2022. Notes the state department of revenue, “It is not meant to completely replace IRS form W-4 for Colorado withholding, but to help employees in a few specific situations fine-tune their Colorado withholding.”

The new form is not mandatory. If an employee does not fill it out, the employer calculates the Colorado income tax withholding based on Form W-4.

New York is also complex

Although the Empire State has not seen any major policy changes, employees should keep in mind the state’s Form IT-2104, Employee’s Withholding Allowance Certificate. The form’s instructions note that “if you submit a federal Form W-4 to your employer for tax year 2020 or later, and you do not file Form IT-2104, your employer may use zero as your number of allowances.” This may result in an incorrect withholding amount.

Additionally, two municipalities in New York — New York City and Yonkers — have their own income taxes, which you must address in Form IT-2104.

These are just two examples of the wide range of rules and policies each state has. The bottom line? Unless you’re in one of the few states without an income tax, be sure to address the state issues as well as the federal issues. Work with your tax advisor to make sure your withholding amounts are correct.

 If you need further explanation about tax rules in your states, contact a business planning attorney, like one from Bott & Associates, Ltd.



Fill out the form below to get in touch with our legal team or call Bozeman office at (406) 582-8822 or our Helena office at (406) 449-4829 to talk to someone right away.

Silverman Law Office - Bozeman

504 W. Main St.

Bozeman, MT 59715

Get Directions

Silverman Law Office - Helena

2620 Colonial Drive

Helena, MT 59601

Get Directions