Date: December 28, 2001
Bulletin No. 300
|Subject||Changes in Federal Income Tax Withholding Tables, Earned Income Tax Credits and Social Security/Medicare Deductions for the Year 2002.|
|Purpose||To advise agencies of changes in withholding allowances and maximum Social Security Tax.|
|Affected Employees||All employees.|
|New rates will be reflected in the Administration checks dated January 2, 2002 and Institution checks dated January 10, 2002.|
The value of a withholding allowance has
been increased to $57.69 weekly, $115.38 biweekly, $250.00 monthly and $3000
annually. To request a copy of the Circular E, Employer's Tax Guide, contact the
IRS at the toll-free number 1-800-829-3676 or visit their website at www.irs.ustreas.gov
to view this publication.
The New York State Payroll System calculates taxes based on the annual table.
|Advance Payment of Earned Income Credit||
In 2002, employees whose earned income is
less than $29,201 may be eligible for the advance payment of the Earned Income
Credit (EIC), with a maximum credit of $1,503. The new 2002 tables for
calculating the credits are also included in the circular E.
Eligible employees must complete a new W-5, Earned Income Credit Advance Payment Certificate each year. Copies of the forms may be obtained from IRS.
|Social Security- Medicare Deductions||The 2002 Social Security tax will be calculated at 6.2% on the first $84,900 of wages resulting in a maximum Social Security tax deduction of $5,263.80. The 1.45% Medicare tax will apply to all taxable wages, as there is no wage cap.|
|Questions||Questions regarding this bulletin may be directed to the Payroll Deductions mailbox.|