Tax changes for 2003

Federal withholding tax tables have changed for calendar year 2003. The tax rates can be accessed at the University Payroll Office's homepage (http://www.umich.edu/~payroll/) by selecting the box marked Tax Calculation Help. Also, the amount of each federal exemption has increased from $3,000 to $3,050 per year.

The base for Social Security withholding has increased to $87,000 from $84,900 in 2002. The rate remains at 6.2 percent, allowing a maximum withholding of $5,394, up from $5,263.80 in 2002. The Medicare tax rate remains unchanged at 1.45 percent on all earnings paid.

The Michigan income tax rate has decreased from 4.1 to 4.0 percent, and the state exemption has increased from $3,000 to $3,100 per year.

Employees who wish to change the number of withholding allowances they claim must complete revised federal or state W-4 forms and submit them to the University Payroll Office 15 days before a pay date for the change to be effective for that pay date.

Employees who claimed exempt status in 2002 should review their status and submit a new W-4 soon; otherwise exempt status expires Feb. 15. If 2003 W-4 forms are not available, a 2002 form may be used if employees enter the current date next to their signatures.

W-4 forms are at the Payroll Web site by selecting the box marked Forms and Tables, or by calling (734) 764-1485. Forms also are available at the University Payroll Office, G395 Wolverine Tower-Low Rise; Hospital Payroll, 2901 Hubbard Ste 1500; and from the Human Resource Service Centers.

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