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					          LOS ANGELES UNIFIED SCHOOL DISTRICT
          POLICY BULLETIN



 TITLE:                   Withholding for State Income Tax                       ROUTING
                                                                                 All Schools and Offices
 NUMBER:                  BUL-771.2
                                                                                 Administrators
                                                                                 Time Reporters
 ISSUER:                  Betty T Ng, Controller
                          Accounting and Disbursements Division
 DATE:                    February 17, 2006

 POLICY:                  To provide employees with information regarding current Withholding
                          Table for State Income Tax for the 2006 calendar year.

 MAJOR CHANGES:           This revision replaces Bulletin No. 771.1 of the same subject issued on
                          January 26, 2005. The content reflects changes in the withholding tables
                          for State Income Tax for the 2006 calendar year. Administrators are
                          requested to post this bulletin at their site or provide a copy of this bulletin
                          to each employee.

 GUIDELINES:              The following guidelines apply:

                          I.     BACKGROUND

                                 Effective January 1, 2006, withholding tables for State Income Tax
                                 were revised to reflect the continued indexing of personal income tax
                                 brackets. The District uses a withholding table based on twice the
                                 State biweekly withholding table in the Employer’s Tax Guide as
                                 published by the State of California Employment Development
                                 Department.

                           II.   FORM DE-4 (EMPLOYEE’S STATE WITHHOLDING
                                 ALLOWANCE CERTIFICATE)

                                 Employees who wish to increase or decrease the amount of State tax
                                 withheld must file Form DE-4 (LAUSD version). This form is
                                 available from the time reporter at the employee’s work location.

                                 Employees are to carefully complete and sign Form DE-4. An
                                 incomplete Form DE-4 will be returned to the employee. Form DE-4
                                 must be received by the Payroll Services Branch by the first Thursday
                                 after an employee’s regular payday to be effective for the next
                                 payday.

                                 Submission of Form DE-4, which does not accurately reflect an
                                 employee’s allowances, may result in overwithholding or
                                 underwithholding of tax from salary payments. Any excess
BUL-771.2                                     Page 1 of 7                              February 17, 2006
Accounting and Disbursements Division
         LOS ANGELES UNIFIED SCHOOL DISTRICT
         POLICY BULLETIN



                                  withholding due to an inaccurate DE-4, cannot be refunded by the
                                  District.

                           III.   COMPUTATION OF WITHHOLDING FOR STATE INCOME
                                  TAXES

                                  State withholding taxes are computed in the following manner:

                                  A.    If an employee’s gross pay period salary is equal to or less than
                                        the amount shown below, no state income tax is withheld.

                                             State Tax Table 1 – Low Income Exemption Table

                                                                         0 or 1       2 or more
                                             Single                    $ 828.00       $ 828.00
                                             Married                   $ 828.00       $1,656.00
                                             Head of Household         $1,656.00      $1,656.00


                                  B.    Basic Computation of Withholding for State Income Tax

                                        1.   Subtract from the gross pay period salary any tax-deferred
                                             retirement contribution, flexible spending plan amount,
                                             tax-sheltered annuity, or tax-deferred mutual fund to arrive
                                             at gross pay period salary for tax purposes.

                                        2.   Subtract the appropriate standard deduction amount (see
                                             Table 3) from the taxable gross pay period salary.

                                        3.   If an employee is eligible for additional allowances for
                                             itemized deductions, the appropriate amount (see Table 2)
                                             is also subtracted.

                                        4.   Using the taxable gross salary, the gross tax is computed
                                             using State Tax Table 5.

                                             State Tax Table 3 – Standard Deduction

                                                                          0 or 1       2 or more
                                             Single                       $250           $250
                                             Married                      $250           $500
                                             Head of Household            $500           $500



BUL-771.2                                      Page 2 of 7                            February 17, 2006
Accounting and Disbursements Division
         LOS ANGELES UNIFIED SCHOOL DISTRICT
         POLICY BULLETIN




                                                           State Tax Table 2
                                                  Additional Withholding Allowances Table

                                     1   2    3    4    5    6    7    8    9   10*
                                   $76 $154 $230 $308 $384 $462 $538 $616 $692 $770

                                       * For allowances greater than 10, multiply the total number
                                         claimed by $76.

                                                   State Tax Table 5 - Tax Rate Table
                                                      Quadriweekly Payroll Period

                           Single Person - If the taxable gross is:
                             AT LEAST       BUT LESS THAN      THE TAX IS   PLUS    OF THE AMOUNT OVER

                                   $    0   $       488         $   .00      1.0%           $   0
                                      488         1,152            4.88      2.0%             488
                                    1,152         1,820           18.16      4.0%           1,152
                                    1,820         2,524           44.88      6.0%           1,820
                                    2,524         3,192           87.12      8.0%           2,524
                                    3,192        76,924          140.56      9.3%           3,192
                                   76,924        AND OVER      6,997.64     10.3%          76,924

                           Married Person - If the taxable gross salary is:
                             AT LEAST       BUT LESS THAN      THE TAX IS   PLUS    OF THE AMOUNT OVER
                               $        0    $       976        $     .00    1.0%          $     0
                                      976          2,304            9.76     2.0%              976
                                    2,304          3,640           36.32     4.0%            2,304
                                    3,640          5,048           89.76     6.0%            3,640
                                    5,048          6,384          174.24     8.0%            5,048
                                    6,384         76,924          281.12     9.3%            6,384
                                   76,924        AND OVER       6,841.34    10.3%           76,924

                           Head of Household - If the taxable gross salary is:
                             AT LEAST       BUT LESS THAN      THE TAX IS   PLUS    OF THE AMOUNT OVER
                                   $ 0       $  972             $   .00      1.0%          $     0
                                   972        2,304                9.72      2.0%              972
                                2,304         2,972               36.36      4.0%            2,304
                                2,972         3,676               63.08      6.0%            2,972
                                3,676         4,354              105.32      8.0%            3,676
                                4,354        76,924              158.76      9.3%            4,354
                               76,924        AND OVER          6,908.70     10.3%           76,924


BUL-771.2                                        Page 3 of 7                            February 17, 2006
Accounting and Disbursements Division
         LOS ANGELES UNIFIED SCHOOL DISTRICT
         POLICY BULLETIN



                                        5. Subtract the correct tax credit amount (see Table 4) from
                                           the gross tax. The remaining tax amount is withheld
                                           from the employee’s salary payment.

                                                  State Tax Table 4 - Tax Credit Table
                                                           Exemption Claimed

                                                 Single, Married or Head of Household
                           0     1       2          3       4       5       6       7         8      9       10*

                           0   $6.70   $13.38    $20.08   $26.76   $33.46 $40.16   $46.84   $53.54 $60.24   $66.92


                               * If the number of allowances claimed exceeds 10, the amount of tax
                                 credit allowed can be determined by multiplying the amount for one
                                 allowance by the total number of allowances.

                                        6.      Example of a tax calculation for an employee claiming
                                                single with “0” exemptions and tax deferred deductions:

                                                Total Gross Salary                    $7,000.00
                                                Less: 403-b (T.S.A.)                    <500.00>
                                                       125-C (Flexible Spending Plan)   <200.00>
                                                        Retirement (STRS)               <560.00>
                                                Taxable Gross                         $5,740.00
                                                Less: Standard Deduction (See Table 3) <250.00>
                                                Adjusted Taxable Earnings             $5,490.00

                                                Per tax table – If the taxable gross is at least $3,192 but
                                                less than $76,924 the tax is $140.56 plus 9.3% of the
                                                amount over $3,192 ($5,490 - $3,192 = $2,298 x 9.3% =
                                                $213.72).

                                                Total amount of tax withheld is $140.56 + $213.72 =
                                                $354.28.

                                        7. Example of a tax calculation for an employee claiming
                                           single with “2” exemptions and “2” additional allowances:

                                             Total Gross Salary                                    $7,000.00
                                             Less: 403-b (T.S.A.)                                   <500.00>
                                                   125-C (Flexible Spending Plan)                   <200.00>
                                                    Retirement (STRS)                               <560.00>
                                             Taxable Gross                                         $5,740.00

BUL-771.2                                         Page 4 of 7                                 February 17, 2006
Accounting and Disbursements Division
         LOS ANGELES UNIFIED SCHOOL DISTRICT
         POLICY BULLETIN



                                         Less: standard deductions                         <250.00>
                                               additional withholding allowance (table 2) <154.00>
                                         Actual taxable gross amount                     $5,336.00

                                         Per tax table – If the taxable gross is at least $3,192 but
                                         less than $76,924 the tax is $140.56 plus 9.3% of the
                                         amount over $3,192 ($5,336 - $3,192 = $2,144 x 9.3% =
                                         $199.39).

                                         Total amount of tax withheld is $140.56 + $199.39 = $339.95.

                                   8. Example of a tax calculation for an employee claiming
                                       married with “0” exemptions and tax deferred deductions:

                                           Total Gross Salary                              $7,000.00
                                           Less: 403-b (T.S.A.)                              <500.00>
                                                 125-C (Flexible Spending Plan)              <200.00>
                                                 Retirement (STRS)                           <560.00>
                                           Taxable Gross                                   $5,740.00
                                           Less: standard deduction                          <250.00>
                                           Actual taxable gross amount                     $5,490.00

                                           Per tax table – If the taxable gross is at least $5,048 but less
                                           than $6,384 the tax is $174.24 plus 8% of the amount
                                           over $5,048 ($5,490 - $5,048 = $442 x 8% = $35.36).

                                           Total amount of tax withheld is $174.24 + $35.36 = $209.60.

                                        9. Example of a tax calculation for an employee claiming
                                           married with “2” exemptions and “2” additional allowances.

                                           Total Gross Salary                          $7,000.00
                                           Less: 403-b (T.S.A.)                          <500.00>
                                                  125-C (Flexible Spending Plan)        <200.00>
                                                  Retirement (STRS)                      <560.00>
                                           Taxable Gross                               $5,740.00
                                           Less: standard deduction (table 3)            <500.00>
                                                 additional allowance (table 2)         <154.00>
                                           Actual taxable gross amount                 $5,086.00

                                           Per tax table – If the taxable gross is at least $5,048 but less
                                           than $6,384 the tax is $174.24 plus 8% of the amount
                                           over $5,048 ($5,086 - $5,048 = $38 x 8% = $3.04),
                                           minus tax credit (see table 4) of $13.38.
BUL-771.2                                      Page 5 of 7                              February 17, 2006
Accounting and Disbursements Division
         LOS ANGELES UNIFIED SCHOOL DISTRICT
         POLICY BULLETIN




                                          Total amount of tax withheld is $174.24 + $3.04 - $13.38 =
                                          $163.90

                                 10. Example of a tax calculation for an employee claiming
                                     head of household with “0” exemption.

                                        Total Gross Salary                             $7,000.00
                                        Less: 403-b (T.S.A.)                             <500.00>
                                              125-C (Flexible Spending Plan)             <200.00>
                                               Retirement (STRS)                         <560.00>
                                              Taxable Gross                            $5,740.00
                                              Less: standard deduction (table 3)         <500.00>
                                              Actual taxable gross amount              $5,240.00

                                         Per tax table – If the taxable gross is at least $4,354 but
                                         less than $76,924 the tax is $158.76 plus 9.3% of the
                                         amount over $4,354 ($5,240 - $4,354 = $886 x 9.3% =
                                         $82.40).

                                         Total amount of tax withheld is $158.76 + $82.40 = $241.16.

                                 11. Example of a tax calculation for an employee claiming
                                     head of household with “2” exemptions and “2” additional
                                     allowances.

                                        Total Gross Salary                         $7,000.00
                                        Less: 403-b (T.S.A.)                         <500.00>
                                              125-C (Flexible Spending Plan)         <200.00>
                                              Retirement (STRS)                      <560.00>
                                              Taxable Gross                        $5,740.00
                                              Less: standard deduction (table 3)     <500.00>
                                                    additional allowances (table 2) <154.00>
                                              Actual taxable gross amount          $5,086.00

                                        Per tax table – If the taxable gross is at least $4,354 but less
                                        than $76,924 the tax is $158.76 plus 9.3% of the amount
                                        over $4,354 ($5,086 - $4,354 = $732 x 9.3% = $68.08),
                                        minus tax credit (see table 4) of $13.38.

                                        Total amount of tax withheld is $158.76 + $68.08 - $13.38 =
                                        $213.46



BUL-771.2                                      Page 6 of 7                              February 17, 2006
Accounting and Disbursements Division
         LOS ANGELES UNIFIED SCHOOL DISTRICT
         POLICY BULLETIN




                                C.      Straight Percentage Deductions

                                        1.   Employees may request that a straight percentage rate (not
                                             less than 2%) be used to calculate their State withholding
                                             tax. If this option is selected, the percentage must be
                                             entered on line 3 of Form DE-4. Also, a “0” should be
                                             shown on lines 1 and 2 of the form. The employee’s
                                             marital status must also be indicated.

                                        2.   The percentage selected is applied to the taxable pay period
                                             gross to determine the amount to be withheld.

                                D.      Withholding for State Income Tax on supplemental pay for
                                        athletics, academics, lump-sum vacation, or retroactive
                                        payments is a flat 6%.

 AUTHORITY:               This is a policy of the Accounting and Disbursements Division.

 ASSISTANCE:              For additional information regarding tax rates, please call your local
                          Franchise Tax Board Office or your tax advisor. The Payroll Services
                          Branch staff is not authorized to provide tax advice.

                          Employees who believe there is an error in the amount withheld may call
                          the Deduction Control Unit at (213) 241-2900 for assistance.




BUL-771.2                                      Page 7 of 7                           February 17, 2006
Accounting and Disbursements Division

				
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