This week’s question comes from Madeleine, an executive. I’ve averaged about 30% of my pay going toward federal income tax withholding each pay period. This week I had 35% of my pay withheld from my bonus for federal income tax. Why did my federal income tax withholding increase? Answer: In TD 9276, the IRS promulgated regulations covering supplemental wage payments paid by a single employer (or group of employers under common control) that exceeded $1,000,000 to a single employee in a calendar year. The American Jobs Creation Act of 2004 (Public Law 108-357) requires that withholding from such wages be at a flat rate of 35%. The regulations provide rules for determining whether wages should be considered regular wages or supplemental wages for withholding purposes. Contact Vision Payroll if you have any questions on TD 9276 and withholding on supplemental wages.
December 26, 2008
Question of the Week: Why Did My Federal Income Tax Withholding Increase?
Filed under: News
Vision Payroll
From New Hire to Payroll
With the Click of Button
With the Click of Button
Streamline Your Hiring
Process With
0 Comments