Payroll Information
Income Tax Withholdings
(updated 6/09/2005)

 

American Recovery and Reinvestment Act Information

IRS Federal Tax Withholding Information

In 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers filing joint returns.

The following groups should check their withholding to see if enough is being withheld:

  • Individuals who work two or more jobs,
  • Married couples who both work,
  • Pensioners,
  • Dependents who work but who are not eligible for the making Work Pay tax credit due to their dependent status, and
  • Non-resident aliens, and some resident aliens, who do not have valid Social Security numbers and who are not eligible for the credit.

This tax credit will be calculated at a rate of 6.2 percent of earned income and will phase out for taxpayers with modified adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly.

Wage earners will benefit immediately with a larger paycheck as a result of the changes made to the federal income tax withholding tables to implement the Making Work Pay tax credit. Some individuals may find that the changes built into the withholding tables result in less tax being withheld than they prefer. 

Depending on your personal situation, you may have less withheld from your paycheck than you need or want. If you believe your current withholding is not appropriate for your personal situation, you can perform a quick check using the IRS withholding calculator which can be found at http://www.irs.gov/individuals/article/0,,id=96196,00.html. 

Adjustments can be made by filing a revised Form W-4, Employee's Withholding Allowance Certificate, with your employer.

Federal Income Tax Withholding Change

Employees may notice a change in their net pay on the March 20, 2009 paycheck. 

The Internal Revenue Service (IRS) has issued revised tables for federal tax withholding for wages paid on or after March 20, 2009. These tables were revised due to changes to tax law made in the American Recovery and Reinvestment Act of 2009. 

Employees are not required to complete a new W-4 for federal tax withholding. The revised tables were developed to take into account all current tax provisions.

Employees that want to change the amount withheld for federal tax withholding should complete a new W-4.   The new W-4 should be returned to HRS.

Links of Interest regarding the American Recovery and Reinvestment Act of 2009

Full Summary of Provisions from Senate Finance, House Ways and Means Committees

IRS Information related to the American Recovery and Reinvestment Act of 2009