U.S. Federal Income Tax Withholding

Reference Number: NFC-25-1736885937
Published: January 23, 2025
Effective: Pay Period 25, 2024

Summary

The United States Federal income tax withholding formula is changing. The United States Federal income tax withholding formula includes the following changes:

No action on the part of the employee or the personnel office is necessary.

Note: Employees who intend to claim total Federal tax exemption for calendar year (CY) 2025 must submit a new Form W-4 prior to February 18, 2025. Effective PP 04, 2025, employees who claimed total exemption for CY 2024 and who have not filed a new Form W-4 for CY 2025 will have Federal taxes withheld as single taxpayers with zero withholding allowance. A Form W-4 filed for the prior year does not extend tax exemption into CY 2025. A new Form W-4 must be filed for CY 2025.

Tax Formula

Acceptable Exemption Form:

W-4

Basis for Withholding:

Prior to 2020 – Marital Status and Federal Exemptions

2020 or Later – Marital Status and Steps 2-4 on Form W-4

Acceptable Exemption Data:

Prior to 2020 – S, M, Number of Allowances

Note: Any updates to be made to the prior to 2020 Form W-4 must be made on the 2020 or later Form W-4.

2020 or Later – MS, MJ, HH, and Steps 2-4 on Form W-4 2020 or later.

TSP Deferred:

Yes

Special Coding:

Filing Status

Prior to 2020 – If the Form W-4 is prior to 2020, then the filing status of Single will select the MS filing status value. Similarly, the filing status of Married will select the MJ filing status value.

2020 or Later – Employees first paid after 2019 who have not submitted a Form W-4 are treated as if they have submitted a 2020 or later W-4 claiming Single or Married Filing Separately, Step 2 box is not checked, and no adjustments were entered.

Non-Resident Alien

Prior to 2020 – Exemption Code N, Number of Allowances.

2020 or Later – Exemption Code NR is the only acceptable code for NRA.

  • Non-resident aliens are not eligible to claim the child tax credit or credit for other dependents in step 3 of Form W-4 (if the NRA is a resident of Canada, Mexico, or South Korea, or a student from India, or a business apprentice from India, they may claim, under certain circumstances (see Notice 1392, Supplemental Form W-4 Instructions for Non-resident Aliens), the child tax credit or credit for other dependents).
  • If the filing status is not equal to Single and the employee is a non-resident alien, then the default value used will be Single.

Determine the Total Number of Allowances as follows:

Claim only one allowance, unless a resident of Canada, Mexico, South Korea, or a United States national.

Withholding Formula (Effective Pay Period 25, 2024)

  1. Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
  2. Subtract the nontaxable biweekly Federal Employee Health Benefits Plan payment(s) (includes dental and vision insurance program, and flexible spending account-health care and dependent care deductions) from the amount computed in step 1.
  3. Add the taxable biweekly fringe benefits (e.g., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
  4. Multiply the adjusted gross biweekly wages by the number of pay dates in the tax year to obtain the gross annual wages.
  5. If the employee is an NRA, add the amount from the table below based on Form W-4 status.

    Form W-4 Status

    Amount

    Employee hired before 2020 and has not submitted a 2020 or later Form W-4

    $10,700

    Employee hired in 2020 or later; or employee has submitted a 2020 or later Form W-4

    $15,000
  6. If the employee has submitted a 2020 or later Form W-4, then add the annual Other Income claimed in step 4a of the Form W-4.
  7. If the employee has submitted a 2020 or later Form W-4, then subtract the annual deductions claimed in step 4b of the Form W-4.
  8. Subtract the wage exemption amount from the table below based on Form W-4 status.

Note: If the result is less than zero, the Adjusted Annual Wage Amount is zero.

Form W-4 Status:

Amount:

Employee has not submitted a 2020 or later Form W-4.

Multiply the number of withholding allowances claimed on previous Form W-4 by $4,300.

Employee submitted a 2020 or later Form W-4 and the step 2 box is checked on the Form W-4.

$0

Employee has submitted a 2020 or later Form W-4, the step 2 box is not checked on the Form W-4, and the marital status is Married Filing Jointly.

$12,900

Employee has submitted a 2020 or later Form W-4, the step 2 box is not checked on the Form W-4 and the marital status is NOT Married Filing Jointly.

$8,600
  1. Apply the taxable income computed in step 8 to one of the tables below to determine the Federal income tax withholding.

Standard Single Tax Table; use this table for employees who have:

If the Amount of Taxable Income Is:

The Amount of Tax Withholding Should Be:

Over $0 but not over $6,400

$0

Over $6,400 but not over $18,325

$0 plus 10.0% of excess over $6,400

Over $18,325 but not over $54,875

$1,192.50 plus 12.0% of excess over $18,325

Over $54,875 but not over $109,750

$5,578.50 plus 22.0% of excess over $54,875

Over $109,750 but not over $203,700

$17,651 plus 24.0% of excess over $109,750

Over $203,700 but not over $256,925

$40,199 plus 32.0% of excess over $203,700

Over $256,925 but not over $632,750

$57,231 plus 35.0% of excess over $256,925

Over $632,750

$188,769.75 plus 37.0% of excess over $632,750

Standard Married Filing Jointly Tax Table; use this table for employees who have:

If the Amount of Taxable Income Is:

The Amount of Tax Withholding Should Be:

Over $0 but not over $17,100

$0

Over $17,100 but not over $40,950

$0 plus 10.0% of excess over $17,100

Over $40,950 but not over $114,050

$2,385 plus 12.0% of excess over $40,950

Over $114,050 but not over $223,800

$11,157 plus 22.0% of excess over $114,050

Over $223,800 but not over $411,700

$35,302 plus 24.0% of excess over $223,800

Over $411,700 but not over $518,150

$80,398 plus 32.0% of excess over $411,700

Over $518,150 but not over $768,700

$114,462 plus 35.0% of excess over $518,150

Over $768,700

$202,154.50 plus 37.0% of excess over $768,700

Standard Head of Household Tax Table; use this table for employees who have submitted a 2020 or later Form W-4, claim Head of Household, and did not check the box in step 2.

If the Amount of Taxable Income Is:

The Amount of Tax Withholding Should Be:

Over $0 but not over $13,900

$0

Over $13,900 but not over $30,900

$0 plus 10.0% of excess over $13,900

Over $30,900 but not over $78,750

$1,700 plus 12.0% of excess over $30,900

Over $78,750 but not over $117,250

$7,442 plus 22.0% of excess over $78,750

Over $117,250 but not over $211,200

$15,912 plus 24.0% of excess over $117,250

Over $211,200 but not over $264,400

$38,460 plus 32.0% of excess over $211,200

Over $264,400 but not over $640,250

$55,484 plus 35.0% of excess over $264,400

Over $640,250

$187,031.50 plus 37.0% of excess over $640,250

Higher Single Tax Table; use the table below for employees who have submitted a 2020 or later Form W-4, claim Single or Married Filing Separately, and checked the box in step 2 of the IRS Form W-4 (to view the IRS Form W-4, including tables and worksheets).

If the Amount of Taxable Income Is:

The Amount of Tax Withholding Should Be:

Over $0 but not over $7,500

$0

Over $7,500 but not over $13,463

$0 plus 10.0% of excess over $7,500

Over $13,463 but not over $31,738

$596.25 plus 12.0% of excess over $13,463

Over $31,738 but not over $59,175

$2,789.25 plus 22.0% of excess over $31,738

Over $59,175 but not over $106,150

$8,825.50 plus 24.0% of excess over $59,175

Over $106,150 but not over $132,763

$20,099.50 plus 32.0% of excess over $106,150

Over $132,763 but not over $320,675

$28,615.50 plus 35.0% of excess over $132,763

Over $320,675

$94,384.88 plus 37.0% of excess over $320,675

Higher Married Filing Jointly Tax Table; use the table below for employees who have submitted a 2020 or later Form W-4, claim Married or Married Filing Jointly, and checked the box in step 2 of the IRS Form W-4 (to view the IRS Form W-4, including tables and worksheets).

If the Amount of Taxable Income Is:

The Amount of Tax Withholding Should Be:

Over $0 but not over $15,000

$0

Over $15,000 but not over $26,925

$0 plus 10.0% of excess over $15,000

Over $26,925 but not over $63,475

$1,192.50 plus 12.0% of excess over $26,925

Over $63,475 but not over $118,350

$5,578.50 plus 22.0% of excess over $63,475

Over $118,350 but not over $212,300

$17,651 plus 24.0% of excess over $118,350

Over $212,300 but not over $265,525

$40,199 plus 32.0% of excess over $212,300

Over $265,525 but not over $390,800

$57,231 plus 35.0% of excess over $265,525

Over $390,800

$101,077.25 plus 37.0% of excess over $390,800

Higher Head of Household Tax Table; use the table below for employees who have submitted a 2020 or later Form W-4, claim Head of Household, and checked the box in step 2 of the IRS Form W-4 (to view the IRS Form W-4, including tables and worksheets).

If the Amount of Taxable Income Is:

The Amount of Tax Withholding Should Be:

Over $0 but not over $11,250

$0

Over $11,250 but not over $19,750

$0 plus 10.0% of excess over $11,250

Over $19,750 but not over $43,675

$850 plus 12.0% of excess over $19,750

Over $43,675 but not over $62,925

$3,721 plus 22.0% of excess over $43,675

Over $62,925 but not over $109,900

$7,956 plus 24.0% of excess over $62,925

Over $109,900 but not over $136,500

$19,230 plus 32.0% of excess over $109,900

Over $136,500 but not over $324,425

$27,742 plus 35.0% of excess over $136,500

Over $324,425

$93,515.75 plus 37.0% of excess over $324,425

  1. Divide the annual Federal income tax withholding calculated in step 9 by the number of pay dates in the tax year to obtain the biweekly Tentative Federal Withholding amount.

  2. If the employee has submitted a 2020 or later Form W-4 and has entered an Annual Dependent Tax Credit in step 3 of the Form W-4, divide the Annual Dependent Tax Credit by the appropriate number of pay dates in the tax year. Subtract the result from the biweekly Tentative Federal Withholding amount in step 10.

  3. If the employee has elected to have additional tax withheld per pay period, then add the additional amount to the pay period tax calculated in the previous steps to determine the amount of tax to be withheld for this payroll period.

Resources

To view the updated tax formula, go to the HR and Payroll Clients page from the MyNFC drop-down menu on the NFC Home page. Select the Publications tab and select Taxes from the Publications Library section to launch the tax map. Select the desired State from the map provided for the formula.

Inquiries

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