|
OF Bulletin 07GA2.09 |
January 18, 2007 |
2007 FEDERAL INCOME TAX WITHHOLDING
FORMULA
AND OTHER RATES
1.
REASON FOR ISSUE:
This bulletin provides the
2007 Federal income tax withholding formula, Federal income tax withholding
rate for supplemental payments, military deposit and back pay interest rates, OASDI
and Medicare wage base and withholding rates as well as the Thrift Savings Plan
(
2.
FEDERAL INCOME TAX WITHHOLDING FORMULA: The
2007 Federal income tax withholding formula affects the computation of the Federal
income tax deductions for salary paid on or after January 1, 2007. Following are the procedures for computing the
2007 Federal income tax withholding:
a. Calculate the annualized gross wages by
multiplying the biweekly gross wages by 26 pay periods.
b. If
the employee participates in the TSP, TSP Catch-Up, FSA program, Federal
Employees Health Benefits – Premium Conversion (FEHB-PC) program or FEDVIP
Vision/Dental, multiply the biweekly deductions by 26 and subtract this result
from the annualized gross wages to determine the adjusted annualized gross
wages.
c.
Multiply the
number of exemptions claimed by $3,400.00 and subtract this result from the adjusted
annualized gross wages to determine taxable wages.
d.
If the employee
is SINGLE or HEAD OF HOUSEHOLD, apply the rates below to taxable wages to
determine the annual tax amount.
|
TAXABLE
WAGES |
|
|
|
OVER |
NOT OVER |
AMOUNT OF
TAX |
|
$0 |
$2,650.00 |
$0.00 plus
0.0% over $0.00 |
|
2,650.00 |
10,120.00 |
0.00 plus 10.0%
over 2,650.00 |
|
10,120.00 |
33,520.00 |
747.00 plus
15.0% over 10,120.00 |
|
33,520.00 |
77,075.00 |
4,257.00 plus
25.0% over 33,520.00 |
|
77,075.00 |
162,800.00 |
15,145.75 plus
28.0% over 77,075.00 |
|
162,800.00 |
351,650.00 |
39,148.75 plus
33.0% over 162,800.00 |
|
351,650.00 |
|
101,469.25 plus
35.0% over 351,650.00 |
e.
If the employee
is MARRIED, apply the rates below to
the taxable wages to determine the annual tax amount.
|
TAXABLE WAGES |
|
|
|
OVER |
NOT OVER |
AMOUNT OF TAX |
|
$0 |
$8,000.00 |
$0.00 plus 0.0% over $0.00 |
|
8,000.00 |
23,350.00 |
0.00 plus 10.0% over
8,000.00 |
|
23,350.00 |
70,700.00 |
1,535.00 plus 15.0% over 23,350.00 |
|
70,700.00 |
133,800.00 |
8,637.50 plus 25.0% over 70,700.00 |
|
133,800.00 |
203,150.00 |
24,412.50 plus 28.0% over 133,800.00 |
|
203,150.00 |
357,000.00 |
43,830.50 plus 33.0% over 203,150.00 |
|
357,000.00 |
|
94,601.00 plus 35.0% over 357,000.00 |
f. Divide
the annual tax amount calculated in steps 2d or 2e by 26 to determine the
biweekly withholding amount.
3. FEDERAL WITHHOLDING FOR
SUPPLEMENTAL PAYMENTS: For tax year 2007, the Federal tax withholding rate
for supplemental payments will remain at 25%.
This rate applies to such payments as awards, voluntary separation
incentive payments, and lump sum annual leave payments.
4. MILITARY SERVICE DEPOSIT
RATES: The following are calendar year interest rates to be
used for computing military service deposits.
|
YEAR |
INTEREST |
YEAR |
INTEREST |
|
2007 |
4.875 |
1995 |
7.000 |
|
2006 |
4.125 |
1994 |
6.250 |
|
2005 |
4.375 |
1993 |
7.125 |
|
2004 |
3.875 |
1992 |
8.125 |
|
2003 |
5.000 |
1991 |
8.625 |
|
2002 |
5.500 |
1990 |
8.750 |
|
2001 |
6.375 |
1989 |
9.125 |
|
2000 |
5.875 |
1988 |
8.375 |
|
1999 |
5.750 |
1987 |
9.000 |
|
1998 |
6.750 |
1986 |
11.125 |
|
1997 |
6.875 |
1985 |
13.000 |
|
1996 |
6.875 |
|
|
5. BACK PAY INTEREST RATES: The
following rates should be used to update the OPM provided Back pay award
interest computation program:
|
January 1,
2007 |
8% |
October 1, 2003 |
4% |
|
October 1, 2006 |
8% |
July 1, 2003 |
5% |
|
July 1, 2006 |
8% |
April 1, 2003 |
5% |
|
April 1, 2006 |
7% |
January 1, 2003 |
5% |
|
January 1, 2006 |
7% |
October 1, 2002 |
6% |
|
October 1, 2005 |
7% |
July 1, 2002 |
6% |
|
July 1, 2005 |
6% |
April 1, 2002 |
6% |
|
April 1, 2005 |
6% |
January 1, 2002 |
6% |
|
January 1, 2005 |
5% |
October 1, 2001 |
7% |
|
October 1, 2004 |
5% |
July 1, 2001 |
7% |
|
July 1, 2004 |
4% |
April 1, 2001 |
8% |
|
April 1, 2004 |
5% |
January 1, 2001 |
9% |
|
January 1, 2004 |
4% |
October 1, 2000 |
9% |
6. OASDI and MEDICARE WAGE BASE
AND WITHHOLDING RATES: For 2007,
the OASDI wage base is $97,500 effective January 1, 2007. The withholding rate for OASDI remains at
6.20%. The wage base for Medicare is
still unlimited and the withholding rate for Medicare remains at 1.45%
7. THRIFT SAVINGS
8. FLEXIBLE SPENDING ACCOUNTS ANNUAL
LIMIT: For 2007, the Health Care FSA maximum contribution limit
is $5,000 and the maximum contribution limit to a Dependent Care FSA remains at
$5,000.
9. RESCISSION: This
bulletin rescinds OF Bulletin 06GA2.12 dated, January 13, 2006.
10. QUESTIONS: Direct
questions concerning this bulletin
to the appropriate office below:
|
VHA FACILITIES |
VHA PAYROLL HELPLINE (OUTLOOK) |
|
VBA FACILITIES |
202-273-6720 |
|
ALL OTHERS |
PAYROLL POLICY (OUTLOOK) |
//s// January 18, 2007
ROMANO
MASCETTI,
Associate Deputy Assistant
Secretary for Financial Policy