As of your 4/3/09 payroll, and as required by The Department of the Treasury, we have implemented the new tax withholding tables to reflect the Making Work Pay credit and other changes resulting from the American Recovery and Reinvestment Act of 2009.  These tables will reduce the amount of federal income tax withheld from your wages by up to $400 for employees claiming single status and up to $800 for employees claiming married status on their W-4 forms.  The withholding change is automatic -- you DO NOT have to submit a new Form W-4 (Employee's Withholding Allowance Certificate).

 

However, we wanted to make you aware of some situations where you may want to submit a new W-4:

 

·         If you concurrently have more than one job, or you are married and your spouse also works.  For instance, if you and your spouse both claim Married on your W-4 forms and you file jointly, or you have two jobs and you claim married for both employers, you may owe up to $800 (or have your refund reduced by $800) because you would be receiving the $800 credit in both payroll checks.

 

·         If you can be claimed as a dependent on someone else's income tax return.

 

·         If you are married and your combined income places you in a higher tax bracket that may phase out, or completely eliminate, the credit.  For instance, if you and your spouse have a combined income of $150,000 or more, you could potentially owe $1,600 when you file your 2009 taxes because the credit phases out with higher earners. 

 

If any of these situations apply to you, to ensure that you are have enough deducted from your paycheck throughout the year, you may want to file a new Form W-4 and claim fewer withholding allowances on line 5 and/or request an additional withholding amount on line 6. 

 

We cannot tell you what to do or what to put on your Form W-4 because everyone's tax situation is different; we just wanted to make sure that you had this additional information so you could make an informed decision.  Additional information and help is available from the Internal Revenue Service at their website, www.irs.gov.   Click on "More Online Services," then click on "Withholding Calculator."  This tool will help you determine the number of allowances and extra withholding to claim on Form W-4.  It will help you plan for the year based on your new withholding amounts to help avoid any problems when you complete your 2009 tax return.