Fewer, small refunds offer a reminder: Update your W-4

Have you filed your 2018 Idaho individual income tax return yet?

State income tax receipts finally are starting to pick up after lagging far behind year-earlier numbers for most of the budget year that began last July 1; however, the number and size of tax refunds remain below a year ago.

While that situation also figures to improve as we approach the April 15 filing deadline, there’s an important message in the 2018 tax refund numbers for the rest of this year: If getting a bigger refund is your goal – or at least not having to pay more taxes with next year’s return – now is the time to update your 2019 income tax withholding information.

So far this year, through March 9, the Tax Commission had issued 157,547 refunds on 2018 income tax payments. That’s 20,320 or 11.4 percent less than at the same point last year.

The average size of those refunds also was down by $113.86 or 17.6 percent – from $647.12 at the same point in 2018 to $533.26 this year.

That’s consistent with the impact of federal tax reforms enacted last year and at the end of 2017, as well as Idaho tax changes that became law in 2018. Together, those changes had a dramatic effect on how to calculate the appropriate amount of income tax to withhold from each paycheck to cover your tax liability for the year.

The Tax Commission unveiled Idaho’s first-ever state-specific W-4 form in early January, providing the easiest and most accurate way yet to calculate your withholding level. The Idaho form and instructions are much shorter and clearer than the federal W-4, which taxpayers still must use for employer withholding of federal income tax.

If you haven’t updated your information yet, go HERE.