Varner Hall - University of Nebraska–Lincoln
|302 Canfield Adminstration Building/P.O. 880425/Lincoln, NE 68588-0425 |
|(402)472-4455/FAX(402)472-7963 |
|OFFICE OF THE VICE CHANCELLOR FOR BUSINESS AND FINANCE |
March 30, 2009
MEMO TO: UNL Faculty and Staff
FROM: Christine A. Jackson
Vice Chancellor for Business and Finance
SUBJECT: Federal Tax Withholding
As some of you may know, the "Making Work Pay" tax credit was recently passed by Congress as part of the economic stimulus law. As a result, the IRS has released revised Federal tax withholding tables that may reduce the amount of income tax withheld from your wages. This will be effective April 1.
The new tax tables are meant to implement a tax credit of $400 per individual/$800 per married couple filing a joint return. As a result, you may see a decrease in the amount of Federal tax withheld on each paycheck and an increase in your net pay. Higher income taxpayers will see little or no change as the credit is phased out at higher levels of taxable income. You do not need to submit a new W-4, Employee’s Withholding Allowance Certificate form, to receive the automatic withholding change.
One word of caution, while this withholding change is designed to immediately
give you the benefit of the new tax credit, it may result in the underpayment of your income tax liability as income tax rates did not change under the Act. Those especially at risk of under withholding are individuals or couples with more than one job or whose combined income places them in a higher tax bracket. In this case, you may want to adjust your W-4 allowances to prevent under withholding.
We encourage you to talk with your tax preparer for advice on this matter. The University Payroll office cannot provide tax advice.
Employees may update their W-4 by logging into their personal Firefly account. If assistance is needed with the Firefly ID and password, please email Beth Benson at bbenson2@unl.edu. Employees who do not have access to Firefly may contact their payroll department for a blank W-4 form or may obtain a copy from the IRS website at .
For additional help, get IRS Publication 919, “How Do I Adjust My Tax Withholding?” Also, you can visit the IRS website at and use the “Withholding Calculator.”
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