|
OF BULLETIN 00GA2.02 |
DECEMBER 22, 1999 |
2000 FEDERAL INCOME TAX WITHHOLDING
FORMULA, other rates and limits
1. REASON FOR ISSUE: This bulletin transmits the 2000 Federal income tax withholding formula, new retirement deduction rates, military deposit and back pay interest rates, the FICA wage base and the TSP annual contribution limit.
2. FEDERAL INCOME TAX: The 2000 Federal Income Tax withholding formula affects the computation of federal income tax deductions for salary paid on or after January 1, 2000.
2000 FEDERAL INCOME TAX WITHHOLDING FORMULA
a. Calculate the annualized gross wages by multiplying the biweekly gross wages by 26 pay periods.
b. If the employee participates in the Thrift Savings Plan (TSP), multiply the biweekly TSP deduction
by 26 pay periods and subtract this result from the annualized gross wages to determine the adjusted annualized gross wages.
c. Multiply the number of exemptions claimed by $2,800.00 and subtract this result from the annualized/adjusted annualized gross wage (whichever is applicable) to determine taxable wages.
d. If the employee is single or head of household, apply the following tax rates to taxable wages to determine the annual tax amount:
TAXABLE WAGES
|
OVER |
NOT OVER |
AMOUNT OF TAX |
|
$0 |
$2,650.00 |
$0.00 |
|
2,650.00 |
27,850.00 |
$0.00 PLUS 15.00% OVER 2,650.00 |
|
27,850.00 |
59,900.00 |
3,780.00 PLUS 28.00% OVER 27,850.00 |
|
59,900.00 |
134,200.00 |
12,754.00 PLUS 31.000% OVER 59,900.00 |
|
134,200.00 |
289,950.00 |
35,787.00 PLUS 36.000% OVER 134,200.00 |
|
289,950.00 |
AND OVER |
91,857.00 PLUS 39.600% OVER 289,950.00 |
e. If the employee is married, apply the following tax rates to taxable wages to determine the annual tax amount:
TAXABLE WAGES
|
OVER |
NOT OVER |
AMOUNT OF TAX |
|
$0 |
$6,450.00 |
$0.00 |
|
6,450.00 |
48,400.00 |
0.00 PLUS 15.000% OVER 6,450.00 |
|
48,400.00 |
101,000.00 |
6,292.50 PLUS 28.000% OVER 48,400.00 |
|
101,000.00 |
166,000.00 |
21,020.50 PLUS 31.000% OVER 101,000.00 |
|
166,000.00 |
292,900.00 |
41,170.50 PLUS 36.000% OVER 166,000.00 |
|
292,900.00 |
AND OVER |
86,854.50 PLUS 39.600% OVER 292,900.00 |
f. Divide the annual tax amount calculated in step 2d or 2e by 26 to determine the biweekly withholding amount.
3. MILITARY SERVICE DEPOSIT RATES: The following are calendar year interest rates to be used for computing military service deposits: (To determine the composite rate for a particular interest accrual date, refer to MP-6 Part V Supp 2.3, Section 5.12 c(2)(b)(3).
|
2000 |
5.875% |
|
1999 |
5.750% |
|
1998 |
6.750% |
|
1997 |
6.875% |
|
1996 |
6.875% |
|
1995 |
7.000% |
|
1994 |
6.250% |
|
1993 |
7.125% |
|
1992 |
8.125% |
|
1991 |
8.625% |
|
1990 |
8.750% |
4. RETIREMENT RATE: Effective pay period 00-01 (paydate of January 25, 2000), CSRS and FERS employee deductions will increase to the rates shown below. The government contribution is unchanged but is shown for reference purposes.
|
RETIREMENT CODE |
EMPLOYEE DEDUCTION |
*GOVERNMENT CONTRIBTUION |
|
1, R |
7.40% |
8.51% |
|
6, T |
7.90% |
9.01% |
|
C |
1.20% |
8.51% |
|
K |
1.20% |
10.70% |
|
M |
1.70% |
23.30% |
|
E |
1.70% |
9.01% |
*The government contribution rates above were effective pay period 97-21, i.e., the first full pay period after October 1, 1997.
5. BACKPAY INTEREST RATES: The following rates should be used to update the OPM-provided Backpay Award interest computation program:
|
January 1, 2000 |
8% |
|
October 1, 1999 |
8% |
|
July 1, 1999 |
8% |
|
April 1, 1999 |
8% |
|
January 1, 1999 |
7% |
|
October 1, 1998 |
7% |
|
July 1, 1998 |
7% |
|
April 1, 1998 |
7% |
|
January 1, 1998 |
8% |
6. FICA WAGE BASE: The FICA wage base increases from $72,600 to $76,200 effective January 1, 2000. The rate for FICA, 6.20%, remains the same. The wage base for Medicare is still unlimited and the rate for Medicare remains at 1.45%.
7. THRIFT SAVINGS PLAN (TSP) LIMIT: The maximum annual deferral amount for TSP is $10,500 for 2000.
8. RESCISSONS: This bulletin rescinds OFM Bulletins 99GA2.03.
9. QUESTIONS: Questions concerning this bulletin should be directed to the appropriate CFO office below:
|
VHA Facilities |
(202) 273-5484 |
|
VBA Facilities |
(202) 273-7309 |
//s//
James G. Bradley,
Director, Accounting and Payroll Service (047GA)