The Percentage Method of Withholding is addressed in this memo which includes extractions from the 2025 Federal Income Tax Withholding Tables (found in the IRS Publication 15-T).
Please Note:
- Advance payment of earned income credit (EIC) through payroll payments expired on December 31, 2010. Individuals eligible for EIC in 2024 can still claim the credit when they file their 2024 federal income tax return. Additionally, any employee who expects to be eligible for the EIC and will have income tax withheld from wages in 2024 may reduce their withholding to receive the benefit of a portion of the credit throughout the year.
- In calendar year 2020, the IRS eliminated withholding allowances, but employees may report the amount of credit in Step 3. Step 3 of Form W-4 provides instructions for determining the amount of the child tax credit and the credit for other dependents that you may claim when you file your tax return. You may also include other tax credits in this step.
- Individual tax calculations and estimates can be readily determined by using the Central Payroll Bureau, Net Pay Calculator located with the following link:
Payroll Online Services – Click on “Net Pay Calculator”
Other related documents located from our home page:
- Click on “Payroll Officers / then click on Current Memos”
- 2024 Earned Income Credit (EIC)
- 2025 Maryland State and Local Income Tax Withholding Information
Click Here to view the 2025 Federal Income Tax Withholding Tables