FROM THE OFFICE OF PUBLIC AFFAIRS

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Today, the Treasury Department and the Internal Revenue Service mailed the new lower tax withholding tables to small businesses. Approximately 8.5 million copies of IRS Publication 15-T, “New Withholding Tables for 2003” are being mailed to small businesses. The new withholding tables were posted on Treasury and IRS websites on May 28, 2003, when the President signed into law the Jobs and Growth Tax Relief Reconciliation Act of 2003.

The new withholding tables tell employers and payroll administrators how much less in federal income taxes to withhold from workers’ wages. Employers should use these new tables as soon as they can work them into their payroll systems, but not later than July 1, 2003.  In the next few weeks, workers will begin to see more money in their paychecks.

These withholding changes alone are expected to reduce workers' taxes and put $22 billion into the economy this year, and $35 billion next year.  Under the Jobs and Growth Act, a family of four making $40,000 will see their taxes reduced by $1,133 in 2003, a reduction of 96%.

Among other things, the Jobs and Growth Tax Relief and Reconciliation Act immediately in 2003:

• expands the 10-percent bracket from $6,000 to $7,000 for single filers and from $12,000 to $14,000 for married taxpayers filing joint returns, meaning the lowest tax rate will apply to a larger portion of workers' incomes;
  
• lowers the tax rate for married taxpayers filing jointly from 27% to 15% on taxable incomes between $47,450 and $56,800;
  
• lowers the 27% rate to 25% on taxable income up to $68,800 for single taxpayers ($114,650 for married taxpayers filing joint returns);
  
• lowers the 30% rate to 28% on taxable income up to $143,500 for single taxpayers ($174,700 for married taxpayers filing jointly);
  
• lowers the 35% rate to 33% on taxable income up to $311,950;
  
• lowers the 38.6% rate to 35% on taxable income over $311,950;
  
• reduces the marriage penalty by expanding the standard deduction from $7,950 to $9,500 for married individuals; and
  
• lowers tax rates for millions of small businesses. Twenty-three million small business owners would benefit from the tax act (including all the provisions in the bill).

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Related Documents:

• Publication 15-T "New Withholding Tables for 2003"