W-4 Forms Basics & Setup | Fountain Help Center

W-4 Forms Basics & Setup

Everything you need to know about W-4 forms and the steps for initial configuration

February 6, 2025

The W-4 form, also known as an Employee's Withholding Certificate, is filled out by employees when starting a new job to ensure that the correct amount of income tax is withheld from their paychecks. This form includes information about the employee's filing status, number of dependents, and any additional income.

Every worker in the United States should fill out a federal W-4 form for federal income taxes [1].

State Specific W-4 Forms

The following states have state-specific W-4 forms in addition to the federal W-4 form. If you have employees who reside in one of these states, then they will also need to fill out that state-specific form:

The states that require a state-specific W-4 forms are:

All other states have no income tax. Therefore, they do not have a state-specific W-4 form.

Optional State W-4 Forms

The Fountain I-9 Center also supports several optional state W-4 forms such as forms for military spouse withholding exemptions or certificates of nonresidence.

These optional forms will be automatically assigned to workers who reside in the appropriate state but will be labeled as optional. These optional forms are not required to be completed by workers in their Worker Portal. The states and their additional optional W-4 forms are:

Important Note:

While there is no official deadline for employees to complete W-4 forms, it is recommended that W-4 forms are completed before an employee’s first paycheck. Failure to do so could result in over or underpaying when filing taxes.

W-4 Tax Reciprocity

Many states also require a reciprocal agreement for out-of-state employees. A reciprocal agreement is an agreement between two states that allows employees who work in one state but live in another to request an exemption from tax withholding in their employment state.

The list of states with tax reciprocity agreements can be reviewed in the table below:
State Employee Works In States in Agreement Certificate/Form to Use
Arizona California, Indiana, Oregon, Virginia Form WEC
Withholding Exemption Certificate
District of Columbia All nonresidents who work in DC can claim exemption from withholding for the DC income tax. Form D-4A
Certificate of Nonresidence in the District of Columbia
Illinois Iowa, Kentucky, Michigan, Wisconsin Form IL-W-5-NR
Employee's Statement of Nonresidence in Illinois
Indiana Kentucky, Michigan, Ohio, Pennsylvania, Wisconsin Form WH-47
Certificate of Residence
Iowa Illinois Form 44-016
Employee's Statement of Nonresidence in Iowa
Kentucky Illinois, Indiana, Michigan, Ohio, West Virginia, Wisconsin, Virginia Form 42A809
Certificate of Residence
Maryland District of Columbia, Pennsylvania, Virginia, West Virginia Form MW 507
Employee's Maryland Withholding Exemption Certificate
Michigan Wisconsin, Indiana, Kentucky, Illinois, Ohio, Minnesota Form MI-W4
Employee's Michigan Withholding Exemption Certificate
Minnesota Michigan, North Dakota Form MWR
Reciprocity Exemption/Affidavit of Residency
Montana North Dakota Form NR-2
Employee Certificate of North Dakota Residence
New Jersey Pennsylvania Form NJ-165
Employee's Certificate of Nonresidence in New Jersey
North Dakota Minnesota, Montana Form NDW-R
Reciprocity exemption from withholding for qualifying Minnesota and Montana residents working in North Dakota
Ohio Indiana, Kentucky, Michigan, Pennsylvania, West Virginia Form IT-4
Employee’s Withholding Exemption Certificate
Pennsylvania Indiana, Maryland, New Jersey, Ohio, Virginia, West Virginia Form REV-419
Employee's Nonwithholding Application Certificate
Virginia Kentucky, Maryland, District of Columbia, Pennsylvania, West Virginia Form VA-4
Personal Exemption Worksheet
West Virginia Kentucky, Maryland, Ohio, Pennsylvania, Virginia Form WV/IT-104
Employee's Withholding Exemption Certificate
Wisconsin Illinois, Indiana, Kentucky, Michigan Form W-220
Nonresident Employee's Withholding Reciprocity Declaration

The Fountain I-9 Center supports W-4 Tax Reciprocity. Learn more about turning on this feature later in this article.

W-4 Configuration Steps

To configure your W-4 forms, you'll first create an onboarding task and then assign it to your workers. Follow the steps below to create your W-4 task:

  1. Click Onboard in the left sidebar.
  2. Click Add Flow in the top right.
  3. Type a Flow Name and Flow Description as well as select the Task flow type. Click Next.
  4. Click + Add a task and select W-4.
  5. Type a Title, which will be visible to workers in their Worker Portal, and adjust the Estimated task completion time if desired (the default time is five minutes).
  6. If desired, you can add additional tasks to this flow by clicking + Add a task. When all tasks have been added, click Next.
  7. Assign the segment of workers that will receive this task or assign individual workers. Click Next.
  8. Customize any notifications, set a deadline to complete, set reminder messages, and/or a redirect URL.
  9. Click Publish and send notifications to finish.

W-4 Tax Reciprocity Setting

To turn on W-4 Tax Reciprocity support, Administrators will navigate to the I-9 Settings page by clicking I-9 Center in the left side panel and then clicking Settings. Turn on the toggle under the W-4 State Tax Reciprocity section.

This will automatically assign W-4 forms based on state reciprocity agreements for workers who live and work in two different states. When workers access their W-4 task in their Worker Portal, they will have the option to either opt-in or opt-out of reciprocity. This impacts which W-4 forms are assigned to them as mandatory vs optional. You can also access a list of state reciprocity agreements in this section.

This setting is not visible by default. Reach out to your Fountain Customer Success contact or support@fountain.com if you are interested in using this feature.

Sources

[1] IRS overview of the W-4 form