USDA logo United States
Department of
Agriculture		 Office of the
Chief Financial
Officer		 National
Finance
Center		 P.O. Box 60000
New Orleans
Louisiana 70160

Northern Mariana Islands Income Tax Withholding

Title: I, Payroll/Personnel Manual
Chapter: 28, Section 2, Tax Formulas (TAXES)
Bulletin: Northern Mariana Islands Income Tax Withholding
Reference Number: NFC-07-1197926146
Date: December 17, 2007
Effective: Pay Period 25, 2007
To: Holders of TAXES (Northern Mariana Islands only)
Personnel User Groups
T&A Contact Points in Northern Mariana Islands

Currently, income tax for the Commonwealth of the Northern Mariana Islands (CNMI) is withheld as Federal income tax, and is remitted to CNMI by the Internal Revenue Service. Beginning with wages paid for Pay Period 25, the National Finance Center (NFC) will change the calculation of income tax for CNMI. CNMI tax will now be withheld as state income tax and remitted directly to CNMI.

The new formula will contain Chapter 2 tax, Northern Marianas Wage & Salary Tax (WST), and Chapter 7 tax, Northern Marianas Territorial Income Tax (NMTIT). The Chapter 2 tax is a percentage of the annual gross wages. The Chapter 7 tax is calculated using the Federal income tax exemption code and the Federal withholding formula. Both Chapter 2 and Chapter 7 taxes can be found on the Information/Research Inquiry System (IRIS) screen IR105, State Tax. The Chapter 2 tax will be displayed as State Code CQ, under State Tax 1, and the Chapter 7 tax will be displayed as State Code 88, under State Tax 2. Earnings and Leave statements will have two state tax line items to denote Chapter 2 and Chapter 7 tax withholdings. They will be listed as State Codes CQ2 and CQ7. All employees working in the Northern Mariana Islands will be required to pay the Chapter 2 taxes, including employees who file Exempt from Federal Tax.

To view the updated tax formula, go to NFC's Home Page (www.nfc.usda.gov) and click Pubs & Forms. Then at the Pubs & Forms page left-hand menu, click Tax Formulas and select the appropriate territory from the map provided. Changes on the tax formula are identified by "Left Arrow Right Arrow." For more information regarding the Federal Income Tax formula, refer to the Federal Income Tax Withholding Formula section under tax formulas on the NFC's Home Page.

For questions about NFC processing, contact the Payroll/Personnel Call Center at 504-255-4630.

 

/s/
MARK J. HAZUDA, Director
Government Employees Services Division

Attachment