DiNapoli: State Implements New Reduced
Federal Tax Withholding Ahead of Deadline
State Comptroller Thomas P. DiNapoli today announced the state is ahead of schedule in implementing the reduced federal tax withholding rate for 2009. State workers will see their take-home pay increase starting on March 18. The federal government requires all employers to implement the new rates by April 1.
The new federal withholding rates are a result of the Making Work Pay provision of the American Recovery and Reinvestment Act of 2009. The tax credit is $400 for single workers who make $75,000 or less, and $800 for married workers who have a joint income of $150,000 or less. The credit phases out for higher income earners.
“Times are tough,” DiNapoli said. “I felt it was important to get this money into the hands of employees quickly. It’s not a lot of money but every little bit helps.”
High-income individuals, employees with multiple jobs, or married couples whose combined income places them in a higher tax bracket may elect to submit a revised Form W-4 to ensure sufficient withholding of federal taxes based on the new rates.
Every two weeks, DiNapoli’s office processes payroll for approximately 265,000 full-time and part-time state workers. The state’s bi-weekly payroll is about $558 million.