TAXES 20-01, U.S. Federal Income Tax Withholding

Published: January 10, 2020
Effective: Pay Period 26, 2019

Summary

The United States Federal income tax withholding formula includes the following changes:

Employees who intend to claim total Federal tax exemption for the calendar year (CY) 2020 must submit a new Form W-4 prior to February 16, 2020. Effective Pay Period 04, 2020, employees who claimed total exemption for CY 2019 and who have not filed a new Form W-4 for CY 2020 will have Federal taxes withheld as single taxpayers with zero withholding allowance. A Form W-4 filed for the prior year does not extend tax exemption into CY 2020. A new Form W-4 must be filed for CY 2020.

2020 or Later:

The following changes apply based on Form W-4 2020 or later:

Prior to 2020:

The following changes apply based on Form W-4 prior to 2020:

Tax Formula

Acceptable Exemption Form:

W-4

Basis for Withholding:

Prior to 2020

  • Marital Status and Federal Exemptions

2020 or Later

  • Marital Status and Steps 2-4 on Form W-4

Acceptable Exemption Data:

Prior to 2020

  • MS, MJ, Number of Allowances

2020 or Later

  • MS, MJ, HH and Steps 2-4 on Form W-4 prior to 2020

TSP Deferred:

Yes

Special Coding:

Prior to 2020

  • Exemption Code NR is the only acceptable code for NRA.

Determine the Total Number of Allowances as follows:

  • Claim only one allowance, unless a resident of Canada, Mexico, South Korea, or a United States national.

If the Form W-4 is prior to 2020, then the filing status of Single and Head of Household will all select the MS filing status value.

Similarly, the filing status of Married will select the MJ filing status value.

2020 or Later

  • Non-resident aliens are not eligible to claim the child tax credit or credit for other dependents in step 3 of Form W-4 (if the NRA is a resident of Canada, Mexico, or South Korea, or a student from India, or a business apprentice from India, they may claim, under certain circumstances (see Notice 1392, Supplemental Form W-4 Instructions for Non-resident Aliens), the child tax credit or credit for other dependents).

Withholding Formula (Effective Pay Period 26, 2019)

  1. Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
  2. Subtract the nontaxable biweekly Federal Employee Health Benefits Plan payment(s) (includes dental and vision insurance program, and flexible spending account-health care and dependent care deductions) from the amount computed in step 1.
  3. Add the taxable biweekly fringe benefits (e.g., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
  4. Multiply the adjusted gross biweekly wages by the number of pay dates in the tax year to obtain the gross annual wages.
  5. If the employee is an NRA, add the amount from the table below based on Form W-4 status.

    Form W-4 Status

    Amount

    Employee hired before 2020 and has not submitted a 2020 or later Form W-4

    $8,100

    Employee hired in 2020 or later; or employee has submitted a 2020 or later Form W-4

    $12,400

  6. If the employee has submitted a 2020 or later Form W-4, then add the annual Other Income claimed in step 4a of the Form W-4.
  7. If the employee has submitted a 2020 or later Form W-4, then subtract the annual deductions claimed in step 4b of the Form W-4.

    Note: If the result is less than zero, the Adjusted Annual Wage Amount is zero.

  8. Subtract the wage exemption amount from the table below based on Form W-4 status.

    Form W-4 Status:

    Amount:

    Employee has not submitted a 2020 or later Form W-4.

    Multiply the number of withholding allowances claimed on previous Form W-4 by $4,300.

    Employee submitted a 2020 or later Form W-4 and the step 2 box is checked on the Form W-4.

    $0

    Employee has submitted a 2020 or later Form W-4, the step 2 box is not checked on the Form W-4, and the marital status is Married Filing Jointly.

    $12,900

    Employee has submitted a 2020 or later Form W-4, the step 2 box is not checked on the Form W-4 and the marital status is NOT Married Filing Jointly.

    $8,600

    Note: If the result is less than zero, the Adjusted Annual Wage Amount is zero.

  9. Apply the taxable income computed in step 8 to one of the tables below to determine the Federal income tax withholding.

    The Standard Single Tax Table is used for employees who have:

    • not submitted a 2020 or later Form W-4 and claim Single or Head of Household.

      OR

    • submitted a 2020 or later Form W-4, claim Single or Married Filing Separately, and did not check the box in step 2 of the IRS Form W-4 (to view the IRS Form W-4, including tables and worksheets).

      Standard Single Tax Table

      If the Amount of Taxable Income Is:

      The Amount of Federal Income Tax Withholding Should Be:

      Over $0 but not over $3,800

      $0

      Over $3,800 but not over $13,675

      $0 plus 10.0% of excess over $3,800

      Over $13,675 but not over $43,925

      $987.50 plus 12.0% of excess over $13,675

      Over $43,925 but not over $89,325

      $4,617.50 plus 22.0% of excess over $43,925

      Over $89,325 but not over $167,100

      $14,605.50 plus 24.0% of excess over $89,325

      Over $167,100 but not over $211,150

      $33,271.50 plus 32.0% of excess over $167,100

      Over $211,150 but not over $522,200

      $47,367.50 plus 35.0% of excess over $211,150

      Over $522,200

      $156,235.00 plus 37.0% of excess over $522,200

    The Standard Married Filing Jointly Tax Table is used for employees who have:

    • not submitted a 2020 or later Form W-4 and claim Married.

      OR

    • submitted a 2020 or later Form W-4, claim Married Filing Jointly, and did not check the box in step 2 of the IRS Form W-4 (to view the IRS Form W-4, including tables and worksheets).

      Standard Married Filing Jointly Tax Table

      If the Amount of Taxable Income Is:

      The Amount of Federal Income Tax Withholding Should Be:

      Over $0 but not over $11,900

      $0

      Over $11,900 but not over $31,650

      $0 plus 10.0% of excess over $11,900

      Over $31,650 but not over $92,150

      $1,975.00 plus 12.0% of excess over $31,650

      Over $92,150 but not over $182,950

      $9,235.00 plus 22.0% of excess over $92,150

      Over $182,950 but not over $338,500

      $29,211.00 plus 24.0% of excess over $182,950

      Over $338,500 but not over $426,600

      $66,543.00 plus 32.0% of excess over $338,500

      Over $426,600 but not over $633,950

      $94,735.00 plus 35.0% of excess over $426,600

      Over $633,950

      $167,307.50 plus 37.0% of excess over $633,950

    Use the table below for employees who have submitted a 2020 or later Form W-4, claim Head of Household, and did not check the box in step 2 of the IRS Form W-4 (to view the IRS Form W-4, including tables and worksheets).

    Standard Head of Household Tax Table

    If the Amount of Taxable Income Is:

    The Amount of Federal Income Tax Withholding Should Be:

    Over $0 but not over $10,050

    $0

    Over $10,050 but not over $24,150

    $0 plus 10.0% of excess over $10,050

    Over $24,150 but not over $63,750

    $1,410.00 plus 12.0% of excess over $24,150

    Over $63,750 but not over $95,550

    $6,162.00 plus 22.0% of excess over $63,750

    Over $95,550 but not over $173,350

    $13,158.00 plus 24.0% of excess over $95,550

    Over $173,350 but not over $217,400

    $31,830.00 plus 32.0% of excess over $173,350

    Over $217,400 but not over $528,450

    $45,926.00 plus 35.0% of excess over $217,400

    Over $528,450

    $154,793.50 plus 37.0% of excess over $528,450

    Use the table below for employees who have submitted a 2020 or later Form W-4, claim Single or Married Filing Separately, and checked the box in step 2 of the IRS Form W-4 (to view the IRS Form W-4, including tables and worksheets).

    Higher Single Tax Table

    If the Amount of Taxable Income Is:

    The Amount of Federal Income Tax Withholding Should Be:

    Over $0 but not over $6,200

    $0

    Over $6,200 but not over $11,138

    $0 plus 10.0% of excess over $6,200

    Over $11,138 but not over $26,263

    $493.75 plus 12.0% of excess over $11,138

    Over $26,263 but not over $48,963

    $2,308.75 plus 22.0% of excess over $26,263

    Over $48,963 but not over $87,850

    $7,302.75 plus 24.0% of excess over $48,963

    Over $87,850 but not over $109,875

    $16,635.75 plus 32.0% of excess over $87,850

    Over $109,875 but not over $265,400

    $23,683.75 plus 35.0% of excess over $109,875

    Over $265,400

    $78,117.50 plus 37.0% of excess over $265,400

    Use the table below for employees who have submitted a 2020 or later Form W-4, claim Married Filing Jointly, and checked the box in step 2 of the IRS Form W-4 (to view the IRS Form W-4, including tables and worksheets).

    Higher Married Filing Jointly Tax Table

    If the Amount of Taxable Income Is:

    The Amount of Federal Income Tax Withholding Should Be:

    Over $0 but not over $12,400

    $0

    Over $12,400 but not over $22,275

    $0 plus 10.0% of excess over $12,400

    Over $22,275 but not over $52,525

    $987.50 plus 12.0% of excess over $22,275

    Over $52,525 but not over $97,925

    $4,617.50 plus 22.0% of excess over $52,525

    Over $97,925 but not over $175,700

    $14,605.50 plus 24.0% of excess over $97,925

    Over $175,700 but not over $219,750

    $33,271.50 plus 32.0% of excess over $175,700

    Over $219,750 but not over $323,425

    $47,367.50 plus 35.0% of excess over $219,750

    Over $323,425

    $83,653.75 plus 37.0% of excess over $323,425

    Use the table below for employees who have submitted a 2020 or later Form W-4, claim Head of Household, and checked the box in step 2 of the IRS Form W-4 (to view the IRS Form W-4, including tables and worksheets).

    Higher Head of Household Tax Table

    If the Amount of Taxable Income Is:

    The Amount of Federal Income Tax Withholding Should Be:

    Over $0 but not over $9,325

    $0

    Over $9,325 but not over $16,375

    $0 plus 10.0% of excess over $9,325

    Over $16,375 but not over $36,175

    $705.00 plus 12.0% of excess over $16,375

    Over $36,175 but not over $52,075

    $3,081.00 plus 22.0% of excess over $36,175

    Over $52,075 but not over $90,975

    $6,579.00 plus 24.0% of excess over $52,075

    Over $90,975 but not over $113,000

    $15,915.00 plus 32.0% of excess over $90,975

    Over $113,000 but not over $268,525

    $22,963.00 plus 35.0% of excess over $113,000

    Over $268,525

    $77,396.75 plus 37.0% of excess over $268,525

  10. Divide the annual Federal income tax withholding calculated in step 9 by the number of pay dates in the tax year to obtain the biweekly Tentative Federal Withholding amount.
  11. If the employee has submitted a 2020 or later Form W-4 and has entered an Annual Dependent Tax Credit in step 3 of the Form W-4, divide the Annual Dependent Tax Credit by the appropriate number of pay dates in the tax year. Subtract the result from the biweekly Tentative Federal Withholding amount in step 10.
  12. If the employee has elected to have additional tax withheld per pay period, then add the additional amount to the pay period tax calculated in the previous steps to determine the amount of tax to be withheld for this payroll period.

Resources

To view the updated tax formula, go to the HR and Payroll Clients page from the MyNFC drop-down menu on the National Finance Center (NFC) Home page. Select the Publications tab and select U.S. Income Tax Formulas from the Publications menu to launch the tax map. Select the desired State from the map provided for the formula.

For more information on the redesigned Form W-4, go to the IRS Web site.

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