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Federal Personnel and Payroll System (FPPS) |
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Federal Personnel and Payroll System User Group Representatives |
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Lisa J. Puente, Deputy Chief
Payroll Operations Division
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Tax Changes Implemented Pay Period (PP) 2022-22: States AL, AR, and VA |
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Please share this information with all impacted employees. The following tax changes were implemented in PP 2022-22. As a result, employees may see a change in their tax withholdings. As a reminder, tax changes effective prior to PP 2022-22, are not retroactive.
State Tax
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Alabama State Income Tax Withholding:
- The Taxing Authorities documentation for Alabama has been changed to include information on how tax is calculated if the employee's number of exemptions are equal to 99 or 999.
- These will be calculated as zero exemptions.
- Datamart Query: Tax State = 01
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Arkansas State Income Tax Withholding:
- The state income tax withholding formula for Arkansas is changing effective October 1, 2022.
- The flat tax rate on supplemental wages has been changed from 5.5% to 4.9%.
- The standard deduction has been changed from $2,200 to $2,270.
- The wage threshold to adjust annual net taxable income has been changed from less than $90,601 to less than $91,801.
- The standard tax table has been changed.
- The tax credit formula for employees who qualify for the low-income tax tables has been modified.
- Datamart Query: Tax State = 05
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Virginia State Income Tax Withholding:
- The state income tax withholding formula for Virginia is changing effective October 1, 2022.
- The annual standard deduction is changing from $4,500 to $8,000.
- Datamart Query: Tax State = 51
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.
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.
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