Changes in Federal Income Tax Withholding Tables, Earned Income Tax Credits and Social Security/Medicare Deductions for the Year 2003
To advise agencies of changes in withholding allowances and maximum Social Security Tax.
New rates will be reflected in the Institution checks dated January 09, 2003 and Administration checks dated January 15, 2003.
The value of a withholding allowance has been increased to $58.65 weekly, $117.31 biweekly, $254.17 monthly and $3,050.00 annually. To request a copy of 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.gov to view this publication. The New York State Payroll System calculates taxes based on the annual table.
Advances Payment of Earned Income Credit
In 2003, employees whose earned income is less than $29,666 or $30,666 if married filing jointly may be eligible for the advance payment of the Earned Income Credit (EIC), with a maximum credit of $1,528. The new 2003 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 2003 Social Security Tax will be calculated at 6.2% on the first $87,000 of wages resulting in a maximum Social Security tax deduction of $5,394.00. The 1.45% Medicare tax will apply to all taxable wages, as there is no wage cap.
Questions regarding this bulletin may be directed to the Payroll Deductions mailbox.