TAXES 19-01, Federal Income Tax Withholding

Published: February 8, 2019
Effective: Pay Period 26, 2018

Summary

The United States new Federal income tax withholding formula includes the following changes:

The annual amount to add to nonresident alien taxable wages prior to calculating withholding will increase from $7,850 to $8,000.
The withholding allowance per exemption will increase from $4,150 to $4,200.
The Single or Head of Household and Married tax withholding tables will change.

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

Tax Formula

Acceptable Exemption Form:	W-4
Basis for Withholding:	Federal Exemptions
Acceptable Exemption Data:	S/M, Number of Allowances
TSP Deferred:	Yes
Special Coding:	None
Additional Information:	Single or Head of Household will both elect Single (S) marital status on line 3 of Form W-4.

Withholding Formula (Effective Pay Period 26, 2018)

Subtract the nontaxable biweekly Thrift Savings Plan (TSP) contribution from the gross biweekly wages.
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.
Add the taxable biweekly fringe benefits (e.g., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
Multiply the adjusted gross biweekly wages by the number of pay dates in the tax year to obtain the gross annual wages.
If the employee is a nonresident alien, add $8,000 to the employee's annual gross pay.
Determine the personal exemption by applying the following guideline and subtract this amount from the gross wages to compute the taxable income:
Exemption Allowance = $4,200 x Number of Exemptions

Apply the taxable income computed in step 6 to the following table to determine the Federal income tax withholding:

Tax Withholding Table Single or Head of Household

If the Amount of Taxable Income Is:	The Amount of Federal Income Tax Withholding Should Be:
Over $0 but not over $3,800	$0
Over $3,800 but not over $13,500	$0 plus 10.0% of excess over $3,800
Over $13,500 but not over $43,275	$970.00 plus 12.0% of excess over $13,500
Over $43,275 but not over $88,000	$4,543.00 plus 22.0% of excess over $43,275
Over $88,000 but not over $164,525	$14,382.50 plus 24.0% of excess over $88,000
Over $164,525 but not over $207,900	$32,748.50 plus 32.0% of excess over $164,525
Over $207,900 but not over $514,100	$46,628.50 plus 35.0% of excess over $207,900
Over $514,100	$153,798.50 plus 37.0% of excess over $514,100

Tax Withholding Table Married

If the Amount of Taxable Income Is:	The Amount of Federal Income Tax Withholding Should Be:
Over $0 but not over $11,800	$0
Over $11,800 but not over $31,200	$0 plus 10.0% of excess over $11,800
Over $31,200 but not over $90,750	$1,940.00 plus 12.0% of excess over $31,200
Over $90,750 but not over $180,200	$9,086.00 plus 22.0% of excess over $90,750
Over $180,200 but not over $333,250	$28,765.00 plus 24.0% of excess over $180,200
Over $333,250 but not over $420,000	$65,497.00 plus 32.0% of excess over $333,250
Over $420,000 but not over $624,150	$93,257.00 plus 35.0% of excess over $420,000
Over $624,150	$164,709.50 plus 37.0% of excess over $624,150

Divide the annual Federal income tax withholding calculated in step 7 by the number of pay dates in the tax year to obtain the biweekly Federal income tax withholding.

Resources

To view the updated tax formula, go to the HR and Payroll Clients page from the MyNFC drop-down menu on the National Finance Center (NFC) homepage. Select the Publications tab and select U.S. Income Tax Formulas from the Publications menu to launch the tax map. Select the desired State from the map provided for the formula.

Inquiries