Employee-Related Taxes

WHAT

COLLECTION

TVA assists the Internal Revenue Service and various state and local agencies in the collection of taxes that may be due and payable.

DEDUCTIONS FROM PAYCHECKS

TVA deducts applicable federal income taxes, social security taxes and state and local income taxes from the wages of its employees.

WHO

All employees

WHY

TVA is required by federal law to deduct federal income taxes and social security taxes from the wages of its employees. TVA is also obligated to deduct state and local taxes from the wages of its employees by agreements established between the U.S. Secretary of the Treasury and state and local governments.

HOW

FEDERAL INCOME TAXES

TVA withholds federal income taxes under guidelines established by the Internal Revenue Service. TVA's Accounting Procedure 18 of the Payroll Manual includes detailed withholding instructions and rates.

SOCIAL SECURITY TAXES

FICA taxes include Social Security and Medicare. Employees pay a fixed percentage of their earnings up to a maximum amount taxable for social security. There is no maximum for Medicare. Civil Service Retirement System employees generally are exempt from the old age and survivors part of the tax, but must pay the Medicare portion. Detailed instructions and withholding rates are included in the Accounting Procedure 18 of the Payroll Manual or employees can contact their human resource representatives for additional information.

STATE INCOME TAXES

Generally, state income taxes are withheld based on the location of the employee's official station, although there are exceptions to this rule. Taxes are withheld according to each state's rates and procedures. TVA currently deducts state taxes for the following states:

Alabama
Arkansas
California
Colorado
Dist. Columbia
Georgia
Illinois
Indiana
Kentucky
Maryland
Missouri
Nebraska
New Jersey
New York
North Carolina
Oklahoma
Pennsylvania
Rhode Island
Virginia
Wisconsin

Many states have established reciprocal agreements with neighboring states that exempt employees who are residents of one state from withholding if they work in a reciprocal state. Employees should consult the Department of Revenue of either state to determine if their withholding status may be affected by such an agreement.

CITY AND COUNTY TAXES

TVA withholds city and county taxes for various local government agencies based on agreements between the Secretary of the Treasury and the government body. Accounting Procedure 18 of the Payroll Manual has additional information on city and county taxes.

HOTEL AND MOTEL OCCUPANCY TAXES

TVA travelers who pay for lodging themselves and are reimbursed by TVA must pay state and local taxes applicable to their lodging in most areas. However, TVA travelers are exempt from state and local taxes in some states and cities, which are listed in the Federal Travel Directory. Consult the Federal Travel Directory for information on how to obtain these exemptions.

ROLES

All Employees

Complete appropriate forms for withholding of federal and state income taxes (Form W-4 is available through the Employee Self-Service option on the InsideNet; through the InsideNet Electronic Forms; or from the Employee Service Center, 1-888-275-8094), and to avoid payment of hotel/motel occupancy taxes.

Human Resource Representatives and Payroll Officers

Provide employees with necessary forms.
Assist employees in the proper completion of the forms if necessary.
Answer questions about employee-related tax issues.

Employee Accounting

Processes all forms to establish deductions of applicable income taxes.
Withholds taxes from employees' pay.
Prepares payments to the taxing entities.
Prepares Form W-2.

Accounts Payable

Disburses payments of all taxes payable by TVA.

Employee Service Center

Provide employees with necessary forms.

RESOURCES

Human Resource Representatives
Payroll Officers
Employee Service Center - 1-888-275-8094

Last Revised 9/99