U.S. Office of Personnel Management - Recruiting, Retaining and Honoring a World-Class Workforce to Serve the American People

Related Topics

• Actual Military Pay and Allowances
• Agency Plans
• Agency Reports and Records
• Annual Leave
• Anthrax
• Bone Marrow/Organ Donation Leave
• Calculation of Employment Taxes
• Civilian Pay and Leave Status
• Computation of Payment of Reservist Differential
• Coverage
• Employee Eligibility
• Employee Reimbursements
• Employer's Tax, Withholding, and Reporting Obligations
• Family and Medical Leave
• General
• Grade and Pay Retention
• Hazardous Duty Pay
• Holiday Premium Pay and Travel
• Leave Earned in Two Part-Time Positions
• Leave Policy
• Leave Sharing - Disability Requirement
• Loan Eligibility
• Lump-Sum Payments for Annual Leave
• Military Leave
• Order of Deduction from Pay
• Overview
• Pay Administration
• Projected Civilian Basic Pay
• Promotions
• Qualifying Periods
• Recruitment, Relocation and Retention Incentives
• Reservist Differential
• Service Agreements
• Severance Pay
• Sick Leave
• Special Rates
• Student Loan Repayment
• Tax Liability
• Time Spent in Training
• Unscheduled Leave
• Withholding from Loan Repayment
• Withholding from Regular Wages
• Withholding from Separate Tax Payment
• Withholding of Employment Taxes
• Within-Grade Increases

To use this method, the agency must–

1. Calculate the correct amount of employment tax withholding on the loan repayment using one of two methods–the regular method described in Question 6 or the flat rate method described in Question 7;
    
2. Deduct the amount of employment tax withholding from the loan repayment; and
    
3. Deposit the amounts withheld and report the employment tax withholding and wages on Forms 941 and W-2 in accordance with normal deposit and reporting procedures.

This answer was provided by the Internal Revenue Service (IRS). For further guidance/clarification on this issue, agency representatives may contact IRS (Federal, State and Local Governments) at (202) 283-9665.