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taxmap/pubs/p15-017.htm#TXMP15b835df 16. How To Use the Income Tax Withholding and Advance Earned Income Credit (EIC) Payment Tables(p36)

Advance Earned Income Credit (EIC) Payment

taxmap/pubs/p15-017.htm#TXMP118213df Income Tax Withholding(p36)

Income Tax Withholding

There are several ways to figure income tax withholding. The following methods of withholding are based on the information that you get from your employees on Form W-4. See section 9 for more information on Form W-4.

taxmap/pubs/p15-017.htm#TXMP456097c5 Wage Bracket Method(p36)

Wage Bracket Method

Under the wage bracket method, find the proper table (on pages 40-59) for your payroll period and the employee's marital status as shown on his or her Form W-4. Then, based on the number of withholding allowances claimed on the Form W-4 and the amount of wages, find the amount of federal tax to withhold. If your employee is claiming more than 10 withholding allowances, see below.

If you cannot use the wage bracket tables because wages exceed the amount shown in the last bracket of the table, use the percentage method of withholding described below. Be sure to reduce wages by the amount of total withholding allowances in Table 5 on this page before using the percentage method tables (pages 38-39).

taxmap/pubs/p15-017.htm#TXMP1272387f Adjusting wage bracket withholding for employees claiming more than 10 withholding allowances.(p36)

The wage bracket tables can be used if an employee claims up to 10 allowances. More than 10 allowances may be claimed because of the special withholding allowance, additional allowances for deductions and credits, and the system itself.

Adapt the tables to more than 10 allowances as follows:

1. Multiply the number of withholding allowances over 10 by the allowance value for the payroll period. The allowance values are in Table 5, Percentage Method—2008 Amount for One Withholding Allowance later.
2. Subtract the result from the employee's wages.
3. On this amount, find and withhold the tax in the column for 10 allowances.

This is a voluntary method. If you use the wage bracket tables, you may continue to withhold the amount in the "10" column when your employee has more than 10 allowances, using the method above. You can also use any other method described below.

taxmap/pubs/p15-017.htm#TXMP22411080 Percentage Method(p36)

Percentage Method

If you do not want to use the wage bracket tables on pages 40-59 to figure how much income tax to withhold, you can use a percentage computation based on Table 5 below and the appropriate rate table. This method works for any number of withholding allowances the employee claims and any amount of wages.

Use these steps to figure the income tax to withhold under the percentage method.

1. Multiply one withholding allowance for your payroll period (see Table 5 below) by the number of allowances that the employee claims.
2. Subtract that amount from the employee's wages.
3. Determine the amount to withhold from the appropriate table on page 38 or 39.

Payroll Period	One Withholding Allowance
Weekly	$mn67.31
Biweekly	134.62
Semimonthly	145.83
Monthly	291.67
Quarterly	875.00
Semiannually	1,750.00
Annually	3,500.00
Daily or miscellaneous (each day of the payroll period)	13.46

taxmap/pubs/p15-017.htm#TXMP6cc05a62 Example.(p36)

An unmarried employee is paid $600 weekly. This employee has in effect a Form W-4 claiming two withholding allowances. Using the percentage method, figure the income tax to withhold as follows:

1.	Total wage payment		$600.00
2.	One allowance	$67.31
3.	Allowances claimed on Form W-4	nnnnn2
4.	Multiply line 2 by line 3		$134.62
5	Amount subject to withholding (subtract line 4 from line 1)		$465.38
6.	Tax to be withheld on $465.38 from Table 1—single person, page 38		$n54.81

To figure the income tax to withhold, you may reduce the last digit of the wages to zero, or figure the wages to the nearest dollar.

taxmap/pubs/p15-017.htm#TXMP18ff7538 Annual income tax withholding.(p36)

Figure the income tax to withhold on annual wages under the Percentage Method for an annual payroll period. Then prorate the tax back to the payroll period.

taxmap/pubs/p15-017.htm#TXMP4f43a940
Example.(p36)

A married person claims four withholding allowances. She is paid $1,000 a week. Multiply the weekly wages by 52 weeks to figure the annual wage of $52,000. Subtract $14,000 (the value of four withholding allowances for 2008) for a balance of $38,000. Using the table for the annual payroll period on page 39, $3,722.50 is withheld. Divide the annual tax by 52. The weekly income tax to withhold is $71.59.

taxmap/pubs/p15-017.htm#TXMP5bd75acd Alternative Methods of Income Tax Withholding(p36)

Alternative Methods of Income Tax Withholding

Rather than the Wage Bracket Method or Percentage Method described above, you can use an alternative method to withhold income tax. Publication 15-A describes these alternative methods and contains:

• Formula tables for percentage method withholding (for automated payroll systems),
• Wage bracket percentage method tables (for automated payroll systems), and
• Combined income, social security, and Medicare tax withholding tables.

Some of the alternative methods explained in Publication 15-A are annualized wages, average estimated wages, cumulative wages, and part-year employment.

taxmap/pubs/p15-017.htm#TXMP17fbcbad Advance Payment Methods for the Earned Income Credit (EIC)(p37)

Advance Earned Income Credit (EIC) Payment

To figure the advance EIC payment, you may use either the Wage Bracket Method or the Percentage Method as explained below. You may use other methods for figuring advance EIC payments if the amount of the payment is about the same as it would be using tables in this booklet. See the tolerances allowed in the chart in section 9 of Publication 15-A. See also section 10 in this booklet for an explanation of the advance payment of the EIC.

The number of withholding allowances that an employee claims on Form W-4 is not used in figuring the advance EIC payment. Nor does it matter that the employee has claimed exemption from income tax withholding on Form W-4.

taxmap/pubs/p15-017.htm#TXMP56d6eff2 Wage Bracket Method(p37)

Wage Bracket Method

If you use the wage bracket tables on pages 62-67, figure the advance EIC payment as follows.

Find the employee's gross wages before any deductions using the appropriate table. There are different tables for (a) single or head of household, (b) married without spouse filing certificate, and (c) married with both spouses filing certificates. Determine the amount of the advance EIC payment shown in the appropriate table for the amount of wages paid.

taxmap/pubs/p15-017.htm#TXMP54d097c2 Percentage Method(p37)

Percentage Method

If you do not want to use the wage bracket tables to figure how much to include in an employee's wages for the advance EIC payment, you can use the percentage method based on the appropriate rate table on pages 60 and 61.

Find the employee's gross wages before any deductions in the appropriate table on pages 60 and 61. There are different tables for (a) single or head of household, (b) married without spouse filing certificate, and (c) married with both spouses filing certificates. Find the advance EIC payment shown in the appropriate table for the amount of wages paid.

taxmap/pubs/p15-017.htm#TXMP373102b9 Whole-Dollar Withholding and Paying Advance EIC (Rounding)(p37)

The income tax withholding amounts in the Wage Bracket Tables (pages 40-59) have been rounded to whole-dollar amounts.

When employers use the Percentage Method (pages 38-39) or an alternative method of income tax withholding, the tax for the pay period may be rounded to the nearest dollar.

The Wage Bracket Tables for advance EIC payments (pages 62-67) have also been rounded to whole-dollar amounts. If you use the Tables for Percentage Method of Advance EIC Payments (pages 60-61), the payments may be rounded to the nearest dollar.

(For Wages Paid in 2008)

TABLE 1—WEEKLY Payroll Period
(a) SINGLE person (including head of household)—					(b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) is:			The amount of income tax to withhold is:		If the amount of wages (after subtracting withholding allowances) is:			The amount of income tax to withhold is:
Not over $51			$0		Not over $154			$0
Over—	But not over—n		of excess over—		Over—	But not over—n		of excess over—
$51	—$198		10%	—$51	$154	—$453		10%	—$154
$198	—$653		$14.70 plus 15%	—$198	$453	—$1,388		$29.90 plus 15%	—$453
$653	—$1,533		$82.95 plus 25%	—$653	$1,388	—$2,651		$170.15 plus 25%	—$1,388
$1,533	—$3,202		$302.95 plus 28%	—$1,533	$2,651	—$3,994		$485.90 plus 28%	—$2,651
$3,202	—$6,916		$770.27 plus 33%	—$3,202	$3,994	—$7,021		$861.94 plus 33%	—$3,994
$6,916			$1,995.89 plus 35%	—$6,916	$7,021			$1,860.85 plus 35%	—$7,021
TABLE 2—BIWEEKLY Payroll Period
(a) SINGLE person (including head of household)—					(b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) is:			The amount of income tax to withhold is:		If the amount of wages (after subtracting withholding allowances) is:			The amount of income tax to withhold is:
Not over $102			$0		Not over $308			$0
Over—	But not over—n		of excess over—n		Over—	But not over—n		of excess over—
$102	—$396		10%	—$102	$308	—$906		10%	—$308
$396	—$1,306		$29.40 plus 15%	—$396	$906	—$2,775		$59.80 plus 15%	—$906
$1,306	—$3,066		$165.90 plus 25%	—$1,306	$2,775	—$5,302		$340.15 plus 25%	—$2,775
$3,066	—$6,404		$605.90 plus 28%	—$3,066	$5,302	—$7,988		$971.90 plus 28%	—$5,302
$6,404	—$13,833		$1,540.54 plus 33%	—$6,404	$7,988	—$14,042		$1,723.98 plus 33%	—$7,988
$13,833			$3,992.11 plus 35%	—$13,833	$14,042			$3,721.80 plus 35%	—$14,042
TABLE 3—SEMIMONTHLY Payroll Period
(a) SINGLE person (including head of household)—					(b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) is:			The amount of income tax to withhold is:		If the amount of wages (after subtracting withholding allowances) is:			The amount of income tax to withhold is:
Not over $110			$0		Not over $333			$0
Over—	But not over—n		of excess over—		Over—	But not over—n		of excess over—
$110	—$429		10%	—$110	$333	—$981		10%	—$333
$429	—$1,415		$31.90 plus 15%	—$429	$981	—$3,006		$64.80 plus 15%	—$981
$1,415	—$3,322		$179.80 plus 25%	—$1,415	$3,006	—$5,744		$368.55 plus 25%	—$3,006
$3,322	—$6,938		$656.55 plus 28%	—$3,322	$5,744	—$8,654		$1,053.05 plus 28%	—$5,744
$6,938	—$14,985		$1,669.03 plus 33%	—$6,938	$8,654	—$15,213		$1,867.85 plus 33%	—$8,654
$14,985			$4,324.54 plus 35%	—$14,985	$15,213			$4,032.32 plus 35%	—$15,213
TABLE 4—MONTHLY Payroll Period
(a) SINGLE person (including head of household)—					(b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) is:			The amount of income tax to withhold is:		If the amount of wages (after subtracting withholding allowances) is:			The amount of income tax to withhold is:
Not over $221			$0		Not over $667			$0
Over—	But not over—n		of excess over—		Over—	But not over—n		of excess over—
$221	—$858		10%	—$221	$667	—$1,963		10%	—$667
$858	—$2,830		$63.70 plus 15%	—$858	$1,963	—$6,013		$129.60 plus 15%	—$1,963
$2,830	—$6,644		$359.50 plus 25%	—$2,830	$6,013	—$11,488		$737.10 plus 25%	—$6,013
$6,644	—$13,875		$1,313.00 plus 28%	—$6,644	$11,488	—$17,308		$2,105.85 plus 28%	—$11,488
$13,875	—$29,971		$3,337.68 plus 33%	—$13,875	$17,308	—$30,425		$3,735.45 plus 33%	—$17,308
$29,971			$8,649.36 plus 35%	—$29,971	$30,425			$8,064.06 plus 35%	—$30,425

(For Wages Paid in 2008)

TABLE 5—QUARTERLY Payroll Period
(a) SINGLE person (including head of household)—					(b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) is:			The amount of income tax to withhold is:		If the amount of wages (after subtracting withholding allowances) is:			The amount of income tax to withhold is:
Not over $663			$0		Not over $2,000			$0
Over—	But not over—n		of excess over—		Over—	But not over—n		of excess over—
$663	—$2,575		10%	—$663	$2,000	—$5,888		10%	—$2,000
$2,575	—$8,490		$191.20 plus 15%	—$2,575	$5,888	—$18,038		$388.80 plus 15%	—$5,888
$8,490	—$19,931		$1,078.45 plus 25%	—$8,490	$18,038	—$34,463		$2,211.30 plus 25%	—$18,038
$19,931	—$41,625		$3,938.70 plus 28%	—$19,931	$34,463	—$51,925		$6,317.55 plus 28%	—$34,463
$41,625	—$89,913		$10,013.02 plus 33%	—$41,625	$51,925	—$91,275		$11,206.91 plus 33%	—$51,925
$89,913			$25,948.06 plus 35%	—$89,913	$91,275			$24,192.41 plus 35%	—$91,275
TABLE 6—SEMIANNUAL Payroll Period
(a) SINGLE person (including head of household)—					(b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) is:			The amount of income tax to withhold is:		If the amount of wages (after subtracting withholding allowances) is:			The amount of income tax to withhold is:
Not over $1,325			$0		Not over $4,000			$0
Over—	But not over—n		of excess over—		Over—	But not over—n		of excess over—
$1,325	—$5,150		10%	—$1,325	$4,000	—$11,775		10%	—$4,000
$5,150	—$16,980		$382.50 plus 15%	—$5,150	$11,775	—$36,075		$777.50 plus 15%	—$11,775
$16,980	—$39,863		$2,157.00 plus 25%	—$16,980	$36,075	—$68,925		$4,422.50 plus 25%	—$36,075
$39,863	—$83,250		$7,877.75 plus 28%	—$39,863	$68,925	—$103,850		$12,635.00 plus 28%	—$68,925
$83,250	—$179,825		$20,026.11 plus 33%	—$83,250	$103,850	—$182,550		$22,414.00 plus 33%	—$103,850
$179,825			$51,895.86 plus 35%	—$179,825	$182,550			$48,385.00 plus 35%	—$182,550
TABLE 7—ANNUAL Payroll Period
(a) SINGLE person (including head of household)—					(b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) is:			The amount of income tax to withhold is:		If the amount of wages (after subtracting withholding allowances) is:			The amount of income tax to withhold is:
Not over $2,650			$0		Not over $8,000			$0
Over—	But not over—n		of excess over—		Over—	But not over—n		of excess over—
$2,650	—$10,300		10%	—$2,650	$8,000	—$23,550		10%	—$8,000
$10,300	—$33,960		$765.00 plus 15%	—$10,300	$23,550	—$72,150		$1,555.00 plus 15%	—$23,550
$33,960	—$79,725		$4,314.00 plus 25%	—$33,960	$72,150	—$137,850		$8,845.00 plus 25%	—$72,150
$79,725	—$166,500		$15,755.25 plus 28%	—$79,725	$137,850	—$207,700		$25,270.00 plus 28%	—$137,850
$166,500	—$359,650		$40,052.25 plus 33%	—$166,500	$207,700	—$365,100		$44,828.00 plus 33%	—$207,700
$359,650			$103,791.75 plus 35%	—$359,650	$365,100			$96,770.00 plus 35%	—$365,100
TABLE 8—DAILY or MISCELLANEOUS Payroll Period
(a) SINGLE person (including head of household)—					(b) MARRIED person—
If the amount of wages (after subtracting withholding allowances) divided by the number of days in the payroll period is:			0The amount of income tax 0to withhold per day is:		If the amount of wages (after subtracting withholding allowances) divided by the number of days in the payroll period is:			0The amount of income 0tax to withhold per day is:
Not over $10.20			$0		Not over $30.80			$0
Over—	But not over—n		of excess over—		Over—	But not over—n		of excess over—
$10.20	—$39.60		10%	—$10.20	$30.80	—$90.60		10%	—$30.80
$39.60	—$130.60		$2.94 plus 15%	—$39.60	$90.60	—$277.50		$5.98 plus 15%	—$90.60
$130.60	—$306.60		$16.59 plus 25%	—$130.60	$277.50	—$530.20		$34.02 plus 25%	—$277.50
$306.60	—$640.40		$60.59 plus 28%	—$306.60	$530.20	—$798.80		$97.20 plus 28%	—$530.20
$640.40	—$1,383.30		$154.05 plus 33%	—$640.40	$798.80	—$1,404.20		$172.41 plus 33%	—$798.80
$1,383.30			$399.21 plus 35%	—$1,383.30	$1,404.20			$372.19 plus 35%	—$1,404.20

If the wages are–		And the number of withholding allowances claimed is—
At least	But less than	0	1	2	3	4	5	6	7	8	9	10
		The amount of income tax to be withheld is—
$0	$55	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0
55	60	1	0	0	0	0	0	0