MEMORANDUM
DATE: November 8, 2023
TO: Federal Personnel and Payroll System User Group Representatives
FROM: Christine Zertuche-Rocha, Chief, Payroll Operations Division
SUBJECT: Tax Changes Implemented Pay Period (PP) 2023-23 IN, NE, and Localities for IN, KY, and OR
Please share this information with all impacted employees. The following tax changes were implemented in PP 2023-23. As a result, employees may see a change in their tax withholdings. As a reminder, tax changes are not retroactive to employees’ withholding.
State Tax
- Indiana Income Tax Withholding:
- The state and county income tax withholding formula has changed effective September 15, 2023.
- A new exemption has been added equal to $1,500 for each first-time additional dependent.
- Datamart Query: Tax State = 18
- Nebraska Income Tax Withholding:
- The state income tax withholding formula has changed effective January 1, 2023.
- Eliminate the minimum withholding requirement for employees who claim Exempt on the Form W-4N, Nebraska Withholding Allowance Certificate.
- Datamart Query: Tax State = 31
Local Tax
- Indiana Local Income Tax Withholding:
- County of Dearborn, IN:
- The local income tax has changed effective October 1, 2023.
- The income tax rate has changed from 1.20% to 1.40%.
- Datamart Query: Tax State = 18 City Code = 029
- The local income tax has changed effective October 1, 2023.
- County of Vanderburgh, IN:
- The local income tax has changed effective October 1, 2023.
- The income tax rate has changed from 1.20% to 1.25%.
- Datamart Query: Tax State = 18 City Code = 163
- The local income tax has changed effective October 1, 2023.
- Kentucky Local Income Tax Withholding:
- County of Madison, KY:
- The local income tax has been implemented at 1%.
- Datamart Query: Tax State = 21 City Code = 0151
- County of McCreary, KY:
- The local income tax has been implemented at 1.5%.
- Datamart Query: Tax State = 21 City Code = 0147
- Oregon Local Income Tax Withholding:
- City of Eugene, OR:
- Eugene local city tax withholding has been implemented at .44%.
- Datamart Query: Tax State = 41 City Code = 0660
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. 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 call the IBC Customer Support Center at 1 (866)-367-1272 or by email at Payroll_Helpdesk@ios.doi.gov.