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Additional Tax Changes Implemented Pay Period (PP) 2025-07: LA and MD

MEMORANDUM

DATE: March 26, 2025
TO: Federal Personnel and Payroll System User Group Representatives
FROM: Lisa Puente, Deputy Chief, Payroll Operations Division
SUBJECT: Action Required: Additional Tax Changes Implemented Pay Period (PP) 2025-07: LA and MD

Please share this information with all impacted employees. The following additional tax changes were implemented in PP 2025-07. 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

Louisiana Income Tax Withholding:

  • The state income tax withholding formula has changed effective January 1, 2025.
    • The formula and documentation have been updated based on the state's new form L-4, Employee’s Withholding Certificate.
      • Dependent exemptions are no longer claimed on the L-4 and are ignored.
      • It is recommended that employees file a 2025 version of the L-4.
      • If a married employee claims only one standard deduction, one-half of the married standard deduction will be applied.
      • Datamart Query: Tax State = 22

Maryland Income Tax Withholding:

  • The state income tax withholding formula has changed effective January 1, 2025.
  • The minimum standard deduction has increased from $1,800 to $1,850.
  • The maximum standard deduction has increased from $2,700 to $2,800.
  • Datamart Query: Tax State = 24

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)

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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