EmpowHR: Section 8 - ESS

Federal Tax Data

Federal tax is withheld through payroll deductions based on the processing of the Internal Revenue Service (IRS) Form W-4, Employee's Withholding Allowance Certificate. Federal income tax withholding is based on an IRS formula that includes a calculation of Thrift Savings Plan (TSP) contributions, the number of allowances claimed, and a tax-withholding table for marital status. From this calculation, the tax amount is determined based on the taxable income amount and the tax percentage.

Federal income tax is withheld based on the processing of Form W-4. If a W-4 is not processed, Federal income tax will automatically be withheld at the rate of single with zero exemption until a W-4 is processed.

A Federal income tax certificate does not need to be processed for employees reassigning to another Agency serviced by NFC within the same Department. However, employees transferring from one Department to another Department serviced by NFC must submit a new W-4 at the time the accession action is processed.

An employee may choose to claim exempt if no Federal tax was owed the prior year and the employee does not expect to owe any tax in the current year. The employee must file a W-4 before February 15 of each year if total exemption is claimed. Otherwise, tax withholding will automatically be withheld based on single with zero exemptions.

Note: Employees whose duty station is the Republic of Panama, Virgin Islands, Guam, or the Northern Mariana Islands, may be exempt from Federal income tax. If exempt, the employee must file a W-4 indicating Exempt status.

Before beginning, the following information is needed:

• Marital status of the employee.
• Total number of tax exemptions to be claimed by the employee.
• Any additional withholding amount (in dollars and cents).

  Note: This is an optional field.