Instructions For Form Wr (Page 16 of 17) in pdf

Instructions For Form Wr Page 16

Frequently Asked Questions About the

Withholding Computer Formula

1. Does the federal withholding amount subtracted include FICA?

No.

2. What standard deduction amount should be entered for the Oregon formula?

None. The standard deduction amount allowed under Oregon tax law is already included in the formula.

3. What do you do if the federal tax withholding exceeds $5,000 on an annual basis?

Use $5,000.

4. What is the difference between twice a month and every two weeks?

The twice-a-month formula is based upon 24 pay periods a year. The every two weeks or biweekly

formula is based upon 26 pay periods a year.

5. Is there a straight percentage method that can be used instead of the formula?

No. The federal withholding computer formula is not a single percentage calculation, either.

6. Why is the formula withholding amount different from that shown on the tables?

The difference should be very small and only due to rounding, if there is any difference at all. If there is a

substantial difference, check your calculations. Many times the error can be corrected by completing the

mathematical operation inside the brackets before subtracting the withholding allowance.

7. If the withholding amount is negative, what do I use?

Zero; however, you should check your calculations to make sure your entries are correct.

8. Does my computer program need to allow for subtracting federal withholding from

gross wages?

Yes, up to $5,000 per year.

9. Is the personal exemption credit subtracted before or after the other calculations?

After.

10. Is the format of the Oregon withholding formula similar to that for the federal formula?

Yes; however, the tax brackets and rates are different. In addition, the Oregon formula requires

subtracting the personal exemption credit after the other calculations.

11. What should I do if my “canned” computer package cannot use the Oregon withholding

formula?

Most of the newer packages are flexible enough to use the Oregon formula. Usually you need to answer a

menu of questions about items such as subtracting federal withholding and how to subtract the personal

allowance. Some of the older packages do not allow for subtracting federal withholding or for subtracting

the personal credit allowance after the other calculations. If your package does not accommodate the

Oregon formula, you should contact the publisher of the package.

Instructions For Form Wr Page 16