Web-Based Entry, Processing, Inquiry, and Correction System (EPIC Web)

151 County Tax

County tax is withheld for the county in which an employee works or resides.

Mandatory county tax withholding is based on the county code in the database. If a county tax document is not entered, withholding will be based on the highest rate applicable for the county. Most mandatory county taxes are computed based on a percentage of gross wages and do not allow for the declaration of exemptions (except Clay and Greene in Indiana); therefore, the processing of county tax data is not required. If a tax certificate is not processed, withholding is based on zero exemptions.

If the county ordinance contains provisions which allow an employee to waive or claim exemption from the tax, an exemption certificate or FMS-7311 must be processed indicating the employee is not liable for the tax.

Employees whose duty station residence is located in certain counties may voluntarily elect county tax withholding. A county income tax certificate must be processed to declare the dollar amount or a number of exemptions.

A county tax reduction is allowed if the employee performs 25 percent or more of their work outside the duty station county and wishes to have the withholding amount reduced to the appropriate tax liability. If this data is not entered, taxes will be withheld on the total wage amount.

If an employee is transferring into PPS Payroll/Personnel System or transferring from one Department to another within PPS Payroll/Personnel System, the county taxes deducted YTD should be carried forward to PPS Payroll/Personnel System to prevent overpayment of county tax for counties that have maximum annual tax amounts. For information regarding entry of YTD data, see Master File Change Document Status Codes.

County tax data must be entered if:

• The employee is exempt from withholding.
• The employee wants to authorize additional withholding.
• The employee wants to reduce the amount of tax withholding by estimating a percentage of work performed outside the duty station county.
• The employee resides or works in Clay or Greene county in Indiana.
• The employee is voluntarily electing county tax withholding.

Refer to the tax formulas under Tax Information for a list of voluntary counties. Withholding formulas are located on the HR and Payroll Clients page. Log on to the Internet and go to the NFC Web site (www.nfc.usda.gov). Select the HR and Payroll Clients page from the MyNFC drop-down menu. Select the Publications icon and U.S. Income Tax Formulas to view the Tax Information links.