TAXES 16-23, Oregon State Income Tax Withholding

Published: March 25, 2016
Effective: Pay Period 06, 2016

Summary

The income tax withholding formula for the State of Oregon will include the following changes:

• The annualized deduction for Federal tax withheld will increase from a maximum of $6,450 to $6,500.
• The annual Standard Deduction amount for Single and Married filers will increase.
• The annual tax credit amount, per exemption, will increase from $194 to $195.
• The phase-out table for the Federal tax deduction will change for filers with annual wages of $50,000 or higher.

No action on the part of the employee or the personnel office is necessary.

Tax Formula

Withholding Formula (Effective Pay Period 06, 2016)

1. Subtract the nontaxable biweekly Thrift Savings Plan contributions from the gross biweekly wages.
2. Subtract the nontaxable biweekly Federal Health Benefits Plan payment(s) (includes dental and vision insurance program and flexible spending account - health care and dependent care deductions) from the amount computed in step 1.
3. Add the taxable biweekly fringe benefits (i.e., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
4. Multiply the adjusted gross biweekly wages times 26 to obtain the gross annual wages.
5. Subtract the employee's annualized Federal withholding tax from annualized gross pay to determine annualized taxable wages. The annualized Federal withholding tax to be deducted cannot exceed the maximum amount shown in the following table(s) based on marital status and the annualized gross pay calculated in step 4:

   Note: To calculate the annualized Federal withholding tax, multiply the biweekly Federal income tax withholding times 26 and deduct from the result of step 4.

   Single (Regardless of the Number of Exemptions) Tax Withholding Table

   If the Amount of Taxable Income Is:	The Maximum Federal Deduction Amount Is:
   Over $0 but not over $124,999.99	$6,500
   Over $124,999.99 but not over $129,999.99	$5,200
   Over $129,999.99 but not over $134,999.99	$3,900
   Over $134,999.99 but not over $139,999.99	$2,600
   Over $139,999.99 but not over $144,999.99	$1,300
   Over $144,999.99	$0

   Married (Regardless of the Number of Exemptions) Tax Withholding Table

   If the Amount of Taxable Income Is:	The Maximum Federal Deduction Amount Is:
   Over $0 but not over $249,999.99	$6,500
   Over $249,999.99 but not over $259,999.99	$5,200
   Over $259,999.99 but not over $269,999.99	$3,900
   Over $269,999.99 but not over $279,999.99	$2,600
   Over $279,999.99 but not over $289,999.99	$1,300
   Over $289,999.99	$0

6. Determine the standard deduction allowance by applying the following guideline and subtract this amount from the annual wages:

   If the Employee Is:	The Standard Deduction Is:
   Single claiming less than three exemptions	$2,155
   Single claiming three or more exemptions	$4,315
   Married	$4,315

7. If the employee's annualized gross wages calculated in step 4 are less than $50,000, calculate the annual tax amount on the adjusted taxable wages using one of the tables below.

   Single (With Less Than Three Exemptions) Tax Withholding Table

   If the Amount of Taxable Income Is:	The Amount of Tax Withholding Should Be:
   Over $0 but not over $3,350	$195.00 plus 5.00% of excess over $0
   Over $3,350 but not over $8,450	$363.00 plus 7.00% of excess over $3,350
   Over $8,450	$720.00 plus 9.00% of excess over $8,450

   Single (With Three or More Exemptions) or Married Tax Withholding Table

   If the Amount of Taxable Income Is:	The Amount of Tax Withholding Should Be:
   Over $0 but not over $6,700	$195.00 plus 5.00% of excess over $0
   Over $6,700 but not over $16,900	$530.00 plus 7.00% of excess over $6,700
   Over $16,900	$1,244.00 plus 9.00% of excess over $16,900

8. If the employee's annualized gross wages calculated in step 4 are $50,000 or more, calculate the annual tax amount on the adjusted taxable wages using one of the tables below.

   Single (With Less Than Three Exemptions) Tax Withholding Table

   If the Amount of Taxable Income Is:	The Amount of Tax Withholding Should Be:
   Over $0 but not over $8,450	$0.00
   Over $8,450 but not over $125,000	$525.00 plus 9.00% of excess over $8,450
   Over $125,000	$11,014.00 plus 9.90% of excess over $125,000

   Single (With Three or More Exemptions) or Married Tax Withholding Table

   If the Amount of Taxable Income Is:	The Amount of Tax Withholding Should Be:
   Over $0 but not over $16,900	$0.00
   Over $16,900 but not over $250,000	$1,049.00 plus 9.00% of excess over $16,900
   Over $250,000	$22,028.00 plus 9.90% of excess over $250,000

9. Based on the employee's marital status and the annualized gross wages calculated in step 4, reduce the total number of exemptions claimed by the personal allowance shown in the following table (do not reduce exemptions below zero):

   Marital Status	Annualized Wages	Total Exemptions Claimed	Personal Allowance Reduction
   Single	Greater than $100,000	1 or more	1
   Married	Greater than $200,000	1	1
   Married	Greater than $200,000	2 or more	2

10. Multiply the adjusted number of exemptions claimed by $195 and subtract this amount from the annual tax calculated above.
11. Divide the annual Oregon tax withholding by 26 to obtain the biweekly Oregon tax withholding.

Additional Resources

To view the updated tax formula, go to the HR and Payroll Clients page from the MyNFC drop-down menu on the NFC homepage. Click the Publications tab in the center ribbon. Select U.S. Income Tax Formulas from the Publication menu to launch the tax map. Click the desired State from the map provided for the formula.

Inquiries

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