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Tax Changes Implemented Pay Period (PP) 2023-17 AR, ID, UT, and Localities for PA

MEMORANDUM

DATE: August 15, 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) 2023-17 AR, ID, UT, and Localities for PA

Please share this information with all impacted employees. The following tax changes were implemented in PP 2023-17. 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

Arkansas Income Tax Withholding:

  • The state income tax withholding formula has changed effective June 1, 2023.
  • The flat tax rate on supplemental wages has changed from 4.9% to 4.7%.
  • The wage threshold to adjust annual net taxable income has changed from less than $91,801 to less than $91,301.
  • The standard tax table has changed.
  • The tax credit formula for employees who qualify for the low-income tax tables has changed.
  • Datamart Query: Tax State = 05

Idaho Income Tax Withholding:

  • The state income tax withholding formula has changed effective January 1, 2023.
  • The flat tax rate on supplemental wages has changed from 6.0% to 5.8%.
  • The annual deduction per exemption has changed from $3,417 to $3,534.
  • The single and married tax tables have changed.
  • Datamart Query: Tax State = 16

Utah Income Tax Withholding:

  • The state income tax withholding formula has changed effective June 1, 2023.
  • The income tax rate has changed from 4.85% to 4.65%.
  • The base allowance for single filers has changed from $390 to $415.
  • The base allowance for married filers has changed from $780 to $830.
  • The wages exempt from tax credit reduction for single filers have changed from $7,774 to $8,371.
  • The wages exempt from tax credit reduction for married filers have changed from $15,548 to $16,742.
  • Datamart Query: Tax State = 49

Local Tax

Pennsylvania Local Income Tax Withholding:

  • City of Philadelphia, PA:
    • The local income tax has changed effective July 1, 2023.
    • The resident income tax rate has changed from 3.79% to 3.75%.
    • The nonresident tax rate remains unchanged at 3.44%.
    • Datamart Query: Tax State = 42 City Code = 6540
  • City of Johnstown City, PA:
    • The total annual local service tax (LST) has changed effective July 1, 2023.
    • The annual LST has changed from $156 to $52.
    • Datamart Query: Tax State = 42 City Code = 4010

You may execute Datamart queries to identify employees in affected 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.

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.