Early Release Copies Of The 2010 Percentage Method Income Tax Withholding And Advance Earned Income Credit Payment Tables Worksheet
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8Department of the Treasury
Notice 1036
Internal Revenue Service
(Rev. November 2009)
Withholding Adjustment for Nonresident
Early Release Copies of the 2010
Aliens
Percentage Method Income Tax
For 2010, a new procedure applies for figuring the
Withholding and Advance Earned
amount of income tax to withhold from the wages of
nonresident alien employees performing services within
Income Credit Payment Tables
the United States. This procedure requires use of a new
chart and new tables in addition to the withholding tables
used to figure income tax withholding on other
Attached are early release copies of tables that will
employees. The new chart appears below and the new
appear in Publication 15 (Circular E), Employer’s Tax
tables are on the next to last page of this notice.
Guide (for use in 2010). Publication 15 (Circular E) will
be mailed to employers and available at IRS offices in
Instructions. To figure how much income tax to
December.
withhold from the wages paid a nonresident alien
employee performing services in the United States, use
Percentage Method Income Tax
the following steps.
Withholding Tables
Note. Nonresident alien students from India and
The wage amounts shown in the Percentage Method
business apprentices from India are subject to special
Income Tax Withholding Tables are net wages after the
rules. See Publication 15 (Circular E) for more details.
deduction for total withholding allowances. The
Step 1. Add to the wages paid to the nonresident
withholding allowance amounts by payroll period have
alien employee for the payroll period the amount shown
not changed. For 2010, they are:
in the chart below for the applicable payroll period.
One Withholding
Amount to Add to Nonresident Alien
Payroll Period
Allowance
Employee’s Wages for Calculating Income Tax
Weekly
$ 70.19
Withholding Only
Biweekly
140.38
Semimonthly
152.08
Payroll Period
Add Additional
Monthly
304.17
Weekly
$ 39.42
Quarterly
912.50
Biweekly
78.85
Semiannually
1,825.00
Semimonthly
85.42
Annually
3,650.00
Monthly
170.83
Daily or Miscellaneous
14.04
Quarterly
512.50
(each day of the payroll period)
Semiannually
1,025.00
When employers use the percentage method tables, the
Annually
2,050.00
tax for the pay period may be rounded to the nearest
Daily or Miscellaneous
7.88
dollar. (If rounding is used, it must be used consistently.)
(each day of the payroll period)
Withheld tax amounts should be rounded to the nearest
dollar by dropping amounts under 50 cents and increas-
Step 2. Use the amount figured in Step 1 and the
ing amounts from 50 to 99 cents to the next higher
number of withholding allowances claimed (generally
dollar. For example, $2.30 becomes $2 and $2.80 be-
limited to one allowance) to figure income tax
comes $3.
withholding using the tables that are used to figure
Advance Earned Income Credit Payment
income tax withholding for all other employees. If you
Tables
use the percentage method tables published in this
notice, reduce the amount figured in Step 1 by the value
The percentage method tables for the advance earned
of withholding allowances (shown above) and use that
income credit (EIC) are based on gross wages and do
reduced amount to figure income tax withholding from
not require the deduction for withholding allowances.
the percentage method table. If you use the wage
Advance EIC payments apply only to employees eligible
bracket tables that will be published later in Publication
for the credit. Eligibility requirements are shown on Form
15 (Circular E), use the amount figured in Step 1 to
W-5, Earned Income Credit Advance Payment
figure income tax withholding using the wage bracket
Certificate, which the employee gives the employer.
tables.
When employers use the percentage method
advance EIC payment tables, the payment for the pay
Step 3. Use the amount you figured in Step 1 after
period may be rounded to the nearest dollar as
subtracting the value of withholding allowances claimed
described for the percentage method income tax
(generally limited to one allowance) to figure an amount
withholding tables.
from the Tables for Withholding Adjustment for
Catalog No. 21974B
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