Federal Personnel and Payroll System (FPPS)

MEMORANDUM

DATE:

January 7, 2022

TO:

Federal Personnel and Payroll System User Group Representatives

FROM:

Christine Zertuche-Rocha, Chief

Payroll Operations Division

SUBJECT:

Tax Changes Implemented Pay Period (PP) 2022-01 (Federal, PR, CA, GA, IL, IA, KY, ME, MI, MO, NE, NM, NY, NC, OK, OR, SC, WI, and localities for Indiana, Kentucky, and New York

Please share this information with all impacted employees.  The following tax changes were implemented in PP 2022-01.  As a result, employees may see a change in their tax withholdings.

Federal Tax

• U.S. Federal Social Security (OASDI) Wage Base – The wage base has increased from $142,800 to $147,000. There is no limit on Medicare wages and the Social Security and Medicare tax rates remain unchanged.
• U.S. Federal 401 (k) Wage Limits - The 401(k) maximum exclusion limit has increased from $19,500 to $20,500. The catch-up contribution for employees who will be age 50 or over in 2022 will remain $6,500.
• U.S. Federal Income Tax:
  • For withholding based on a pre-2020 Form W-4, the annual amount to add to a nonresident alien's taxable wages prior to calculating withholding has changed from $8,250 to $8,650.
  • For withholding based on a 2020 Form W-4, the annual amount to add to a nonresident alien's taxable wages prior to calculating withholding has changed from $12,550 to $12,950.
  • The standard and high-income tax tables for all marital statuses have changed.

U.S. Territory

• Puerto Rico 401 (k) Wage Limits:
  • The pre-tax contribution limit for U.S. federal employees has increased from $19,500 to $20,500.
  • The catch-up contribution limit for Puerto Rico plans that cover U.S. federal government employees will remain $6,500.
  • The catch-up contribution limit for Puerto Rico-Only Plans and Dual-qualified Plans will remain $1,500. NOTE: This is subject to change.  If this limit changes, another Tax Update will be issued.
  • Datamart Query: Tax State = RQ

State Tax

• California Income Tax Withholding:
  • The low-income exemption amount for Married with 2 or more Exemptions and Single has increased from $15,267 to $31,831
  • The low exemption amount for Married with 2 or more Exemptions and Head of Household has increased from $30,534 to $31,831
  • The standard deduction for Married with 0 or 1 Exemption and Single is increased from $4,601 to $4,803
  • The standard deduction for Married with 2 or more Exemptions and Head of Household has increased from $9,202 to $9,606.
  • The Single, Married, and Head of Household withholding tables have changed
  • The annual personal exemption credit has increased from $136.40 to $141.90
  • Datamart Query: Tax State = 06

• Georgia State Income Tax Withholding:
  • The Standard Deduction for employees who claim Married Filing Joint Where Only One Spouse Works has changed from $6,000 to $7,100.
  • The Standard Deduction for employees who claim Single or Head of Household has changed from $4,600 to $5,400.
  • The Standard Deduction for employees who claim Married Filing Separate or Married Filing Joint Where Both Spouses Work has changed from $3,000 to $3,550.
  • Datamart Query: Tax State = 13

• Illinois State Income Tax Withholding:
  • The annual exemption amount for the basic allowances claimed for taxpayer, spouse, and other dependents has increased from $2,375 to $2,425
  • Datamart Query: Tax State = 17

• Iowa State Income Tax Withholding:
  • The standard deduction amount for employees claiming zero or one withholding allowance has increased from $2,130 to $2,210
  • The standard deduction amount for employees claiming two or more withholding allowances has increased from $5,240 to $5,450
  • Datamart Query: Tax State = 19

• Kentucky State Income Tax Withholding:
  • The annual standard deduction has increased from $2,690 to $2,770
  • Datamart Query: Tax State = 21

• Maine State Income Tax Withholding:
  • The annual exemption per allowances claimed has increased from $4,300 to $4,450.
  • The Single and Married standard deduction tables have changed.
  • The Single and Married withholding tables have changed.
  • Datamart Query: Tax State = 23

• Michigan State Income Tax Withholding:
  • The annual amount per exemption has increased from $4,900 to $5,000.
  • Datamart Query: Tax State = 26

• Missouri State Income Tax Withholding:
  • The flat tax rate for supplemental wages has changed from 5.4% to 5.3%.
  • The standard deduction amount for employees claiming Single, Married Filing Separate, and Married and Spouse Works has changed from $12,550 to $12,950.
  • The standard deduction amount for employees claiming Married and Spouse Does Not Work has changed from $25,100 to $25,900.
  • The standard deduction amount for employees claiming Head of Household has changed from $18,800 to $19,400.
  • The income tax table has changed.
  • Datamart Query: Tax State = 29

• Nebraska State Income Tax Withholding:
  • The annual amount per withholding allowance has increased from $1,960 to $2,080.
  • The Single and Head of Household withholding table has been updated.
  • The Married withholding table has been updated.
  • Datamart Query: Tax State = 31

• New Mexico State Income Tax Withholding:
  • The Single and Married withholding tables are changing.
  • Datamart Query: Tax State = 35

• New York State Income Tax Withholding:
  • The flat tax rate on supplemental wages has changed from 13.78% to 11.70%.
  • The Single and Married tax tables have been updated
  • Datamart Query: Tax State = 36

• North Carolina State Income Tax Withholding:
  • The flat tax rate on supplemental wages has changed from 5.35% to 5.09%.
  • The standard deduction for Single, Married, and Surviving Spouse filers has been increased from $10,750 to $12,750.
  • The standard deduction for Head of Household filers has been increased from $16,125 to $19,125.
  • The adjustment based on the minimum additional withholding amount required to be claimed by nonresident aliens has been changed.
  • Datamart Query: Tax State = 37

• Oklahoma State Income Tax Withholding:
  • The flat tax rate on supplemental wages has changed from 5.0% to 4.75%.
  • The Single and Married tax tables have been updated.
  • Datamart Query: Tax State = 40

• Oregon State Income Tax Withholding:
  • The standard deduction amount for Single filers claiming less than 3 allowances has increased from $2,350 to $2,420.
  • The standard deduction amount for Single filers claiming 3 or more allowances has increased from $4,700 to $4,840.
  • The standard deduction amount for Married filers has increased from $4,700 to $4,840.
  • The annual tax credit amount, per exemption, has increased from $213 to $219.
  • The annualized deduction for federal tax withheld has increased from a maximum of $7,050 to $7,250.
  • The tax tables have changed for all filers.
  • Datamart Query: Tax State = 41

• South Carolina State Income Tax Withholding:
  • The deduction, per personal exemption, has increased from $2,670 to $2,750.
  • The maximum standard deduction in case of any exemptions has increased from $4,200 to $4,580.
  • The table for state income tax withholding calculation has been changed.
  • Datamart Query: Tax State = 45

• Wisconsin State Income Tax Withholding:
  • The deduction amounts for Single and Married filers have been updated.
  • The tax table on annual taxable wages has been updated.
  • The Special Formula tax table for supplemental wages has been updated.
  • Datamart Query: Tax State = 55

Local Tax

• Indiana Local Income Tax Withholding - The Local Income tax withholding rates for the following Indiana counties are changing:

• Kentucky Local Income Tax Withholding:
  • Kenton County: 
    • The maximum withholding wage base has increased from $142,800 to $147,000 to coincide with the 2022 Federal OASDI wage base.
    • The lower taxable wage base limit remains $25,000.
    • The payroll tax rates remain 0.7097% on wages up to $25,000 and 0.1097% on wages greater than $25,000 and up to the OASDI wage maximum of $147,000.
    • The new tax maximum for 2022 has increased from $306.65 to $311.26.
    • Datamart Query: Tax State = 21  County Code 117
  • City of Florence:
    • The maximum withholding wage base has increased from $142,800 to $147,000 to coincide with the 2021 Federal OASDI wage base.
    • The new tax maximum for 2021 has increased to $2,856.00.
    • Datamart Query: Tax State = 21  City Code 1150

• New York – Yonkers Local Income Tax Withholding - The following income tax changes were implemented for residents of the City of Yonkers:
  • The flat tax rate on supplemental wages has changed from 2.30815% to 1.95975%.
  • The Single and Married tax tables have been updated.
    • The tax tables include a flat tax rate for Single filers with taxable earnings of $1,077,550 and over and Married filers with taxable earnings of $2,155,350 and over.
    • Datamart Query: Tax State = 36 City Code 6820

You may execute Datamart queries to identify employees in affected state taxing areas. For Combined File Ad-Hoc query/analysis of applicable States:  add STE Tax State 1 = (State Code above) or STE Tax State 2 = (State Code above) to the filter or prompt lines. See above for the applicable Local Tax State and/or Local Tax City Codes to add to the prompt lines (Occurrences – Other PE Pay). 

The Interior Business Center (IBC) Payroll website is updated frequently; you may view the state tax formulas here:  http://www3.ibc.doi.gov/services/hr/payroll/payrolltopics/taxFormulas.cfm.

If there are any questions, please call the IBC Customer Support Center at 720-673-9958 (interim contact number) or by email at Payroll_Helpdesk@ios.doi.gov.

Resources:

• User Group Distribution List changes: Please contact Lorraine Manzanares, lorraine_m_manzanares@ibc.doi.gov. All requests should come from an Agency User Group Representative.
• FPPS - Customer Central
  • User Group Messages - All
    • User Group Payroll Announcements