DATE: Monday, February 2, 2026
Several federal, state, local, and territorial tax changes were implemented in Pay Period 2026-03. Tax withholding changes can occur throughout the year. For this reason, it is important that you stay up to date on your federal, state, local, and territorial income tax withholding formulas, specifically if you detect a change on your Earnings and Leave Statement.
Key Highlights of the Recent Changes:
- Social Security (OASDI) Wage Base: The OASDI wage base has increased from $176,100 to $184,500.
- 401 (k) Contribution Limits: The amount individuals can contribute to their 401 (k) plans has increased from $23,500 to $24,500. Also, the catch-up contribution limit for employees aged 50 and over has increased from $7,500 to $8,000.
- U.S. Federal Income Tax: The standard and high-income tax tables for all marital status have been updated.
- State and Local Taxes: Many states and localities (cities and counties) have updated their income-tax withholding formulas, which is the calculation that determines how much tax is taken out of each paycheck. We encourage you to review your state’s tax withholding formulas a few times a year to see whether any changes have been made that could impact you.
Resources:
- Summary of Recent Federal, State, Local, and Territorial Income Tax Withholding Changes
- Federal, State and Territorial Income Tax Withholding Formulas
- Tax Withholdings/Voluntary Tax Allotments FAQs – IBC Customer Central
- To help determine whether the right amount of tax is being withheld from your 2026 pay, use the Deductions Worksheet on page 4 of the IRS Form W-4, Employee’s Withholding Allowance Certificate.
- To make changes to your tax withholding, log into Employee Express and select the "Federal Tax (W4)" link in the left navigation menu.
Questions:
- If you have questions regarding tax-withholding issues, please contact the Customer Support Center.