You may need to adjust your tax withholding
From the Payroll Department
As noted in a Bulletin article on April 22, the Internal Revenue Service has released new withholding tables as a part of the Federal Stimulus package that resulted in more take-home pay. The University of St. Thomas started using these tables with the March 13, 2009, paychecks.
The Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers filing joint returns. These credits will be given in 2009 by reducing your withholding tax on your paychecks.
An individual employee with two jobs or a married employee with a working spouse could have an issue with the new federal tax tables underwithholding their taxes.
Example 1: If you hold two jobs with different companies at the same time, each of your employers will give you the benefit of the stimulus up to $400. The result would be that you could receive up to $400 stimulus in your withholding taxes for each job. When you file your 1040 tax return you would only be given up to a $400 stimulus once.
Example 2: If both you and your spouse work and claim "Married" status on your W-4s, your tax withholding at the end of the year would result in up to $800 less taxes being withheld for each of you. When you file your 1040 tax return you would only receive one stimulus up to $800 not $1,600.
Example 3: If you claim "Married" status on your W-4 and your spouse claims "Married, but withhold at higher Single rate," your tax withholding at the end of the year would result in up to $800 less taxes being withheld for you and up to $400 less taxes being withheld for your spouse. When you file your 1040 tax return you would only receive a stimulus up to $800 not $1,200.
Employees who fall into this group should look at the IRS Web site's withholding calculator or consult with their personal tax accountants to determine if they need to revise their form W-4 to ensure enough withholding is held to cover the tax liability for their combined income. The withholding calculator is located on this IRS Web site.
The W-4 forms are available on the payroll Web site. Please return your completed W-4 form to the Payroll Department at AQU 221.