FROM THE OFFICE OF PUBLIC AFFAIRS

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Today, as the President signed into law the Jobs and Growth Tax Relief Reconciliation Act of 2003, the Treasury Department and the Internal Revenue Service posted the new lower withholding tables on their websites.

“I expect that all employers will move as quickly as possible to make these withholding changes and lower the tax bite out of millions of American workers' paychecks.  Workers will begin to see more money in their paychecks in the next few weeks,” stated Treasury Secretary John Snow. “And 23 million small businesses owners--who pay taxes at the individual rates--will have more money to invest in their company, buy new equipment, and hire more workers. Putting more money in the hands of taxpayers is exactly the right thing to help give our economy the boost it needs.  After all, it's their money to begin with, and they know best how to use it.”

The new withholding tables will tell employers and payroll administrators how much less in federal income taxes to withhold from workers’ wages. By the end of the week, wage bracket method tables are also expected to be on the IRS website. Printed copies of Publication 15-T, containing all the withholding tables, will be mailed to all employers nationwide by the third week in June. 

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 dollars 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 from 27% to 15% on taxable incomes between $47,450 and $56,800 for married taxpayers filing jointly;
• 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).

A copy of the new withholding rates is attached.

Related Documents:

• Withholding Table