State Agencies Bulletin No. 394

Subject
New Income Tax Withholding Tables
Date Issued
June 9, 2003

Purpose

To advise agencies of decreases in Federal Income Tax rates, increase in withholding allowances from $3,050 to $3,100 and a decrease in the supplemental wage flat withholding rate from 27% to 25%.

Affected Employees

All employees.

Effective Date(s)

New rates will be reflected in Administration checks dated June 18, 2003 and Institution checks dated June 26, 2003.

Background

The new tables are the result of the Jobs and Growth Tax Relief Reconciliation Act of 2003 signed into law on May 28, 2003. This Act accelerates income tax cuts passed in 2001. It provides marriage tax relief, expands the 10 and 15 percent income tax brackets and lowers the tax rates above 15 percent to 25, 28, 33 and 35 percent.

Tax Tables

The value of a withholding allowance has been increased to $59.62 weekly, $119.23 biweekly, $258.33 monthly and $3,100.00 annually. The new withholding tables will appear in IRS Publication 15-T scheduled to be available to employers by June 18, 2003. To obtain a copy of this publication, contact the IRS at the toll-free number 1-800-829-3676 or visit their website at http://www.irs.gov/

The New York State Payroll System calculates taxes based on the annual table.

Questions

Questions regarding this bulletin may be directed to the Payroll Deductions mailbox.