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Tax Changes Implemented Pay Period (PP) 2025-04: IL, LA, MD, MN, MT, NC, ND, OR, VT, and Localities in PA

MEMORANDUM

DATE: February 13, 2025
TO: FPPS User Group Representatives
FROM: Christine Zertuche-Rocha, Chief, Payroll Operations Division
SUBJECT: Action Required: Tax Changes Implemented Pay Period (PP) 2025-04: IL, LA, MD, MN, MT, NC, ND, OR, VT, and Localities in PA

Please share this information with all impacted employees. The following tax changes were implemented in PP 2025-04. As a result, employees may see a change in their tax withholdings. Please note that tax changes are not retroactive to employees’ withholding.

State Taxes

Illinois Income Tax Withholding:

  • The state income tax withholding formula has changed effective January 1, 2025.
  • The annual exemption amount for the basic allowances claimed for taxpayer, spouse, and other dependents has increased from $2,775 to $2,850.
  • Datamart Query: Tax State = 17

Louisiana Income Tax Withholding:

  • The state income tax withholding formula has changed effective January 1, 2025.
  • The annual exemption calculation for personal exemptions has been replaced by a standard deduction.
  • The annual exemption calculation for dependent exemptions has been removed.
  • The standard deduction for Single filers who claim the standard deduction is $12,500.
  • The standard deduction for Married and Head of Household filers who claim the standard deduction is $25,000.
  • The income tax tables have been replaced by a flat tax rate of 3.09%.
  • Datamart Query: Tax State = 22

Maryland Income Tax Withholding:

  • The state income tax withholding formula has changed effective January 1, 2025.
  • County Tax Changes:
    • The tax tables for Anne Arundel County have changed for Single and Married filers.
    • Calvert County has changed from 3% to 3.2%.
    • Cecil County has changed from 2.75% to 2.74%.
    • St. Mary’s County has changed from 3% to 3.2%.
  • Datamart Query: Tax State = 24

Minnesota Income Tax Withholding:

  • The state income tax withholding formula has changed effective January 1, 2025.
  • The annual amount per exemption has increased from $5,050 to $5,200.
  • The Single and Married tax tables have changed.
  • Datamart Query: Tax State = 27

Montana Income Tax Withholding:

  • The state income tax withholding formula has changed effective January 1, 2025.
  • The tax table has changed.
  • Datamart Query: Tax State = 30

North Carolina Income Tax Withholding:

  • The state income tax withholding formula has changed effective January 1, 2025.
  • The flat tax rate on supplemental wages has changed from 4.6% to 4.35%.
  • The wage tax rate for all filers has changed from 4.6% to 4.35%.
  • The adjustment based on the minimum additional withholding amount required to be claimed by nonresident aliens has been changed.
  • Datamart Query: Tax State = 37

North Dakota Income Tax Withholding:

  • The state income tax withholding formula has changed effective January 1, 2025.
  • The annual amount per exemption claimed on a pre-2020 Form W-4, Employee’s Withholding Certificate, has increased from $4,300 to $5,050.
  • The tax tables for all filing statuses have changed.
  • Datamart Query: Tax State = 38

Oregon Income Tax Withholding:

  • The state income tax withholding formula has changed effective January 1, 2025.
  • The standard deduction amount for Single filers claiming less than 3 allowances has increased from $2,745 to $2,835.
  • The standard deduction amount for Single filers claiming 3 or more allowances has increased from $5,495 to $5,670.
  • The standard deduction amount for Married filers has increased from $5,495 to $5,670.
  • The annual tax credit amount, per exemption, has increased from $249 to $256.
  • The annualized deduction for federal tax withheld has increased from a maximum of $8,250 to $8,500.
  • The tax tables for all filing statuses have changed.
  • Datamart Query: Tax State = 41

Vermont Income Tax Withholding:

  • The state income tax withholding formula has changed effective January 1, 2025.
  • The annual amount per exemption has increased from $5,100 to $5,300.
  • The Single and Married tax tables have changed.
  • Datamart Query: Tax State = 50

Local Taxes

Pennsylvania Local Income Tax Withholding:

  • Altoona:
    • The resident tax rate has changed from 1.6% to 1.7%.
    • Datamart Query: Tax State = 42 City Code = 0130
  • East Whiteland Township:
    • The resident tax rate has changed from .75% to .8%.
    • Datamart Query: Tax State = 42 City Code = 2382
  • New Cumberland Borough:
    • The local service tax has increased from $0 to $52 per year.
    • Datamart Query: Tax State = 42 City Code = 5810
  • Phoenixville Borough:
    • The resident tax rate has changed from 1% to 1.1%.
    • Datamart Query: Tax State = 42 City Code = 6560
  • Spring City Borough:
    • The local service tax has increased from $10 to $52 per year.
    • Datamart Query: Tax State = 42 City Code = 8030

You may execute Datamart queries to identify employees in affected state taxing areas. For Combined File Ad-Hoc query/analysis of applicable States: add STE Tax State 1 = (State Code above) or STE Tax State 2 = (State Code above) to the filter or prompt lines. Another option is the shared Datamart report titled “State Tax Code Report” (State Tax Code Query Now Available). For local tax queries - see above for the applicable Local Tax State and/or Local Tax City Codes to add to the prompt lines (Occurrences – Other PE Pay).

The Interior Business Center (IBC) Payroll website is updated frequently; you may view the state tax formulas here: Federal, State, and Territorial Income Tax Withholding Formulas.

If there are any questions, please contact the IBC Customer Support Center at Payroll_Helpdesk@ios.doi.gov or 866-367-1272.

 

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