This publication contains the new income tax withholding percentage and wage bracket method tables. It also includes the revised advance earned income credit (EIC) payment percentage and wage bracket method tables. The revised formula percentage method, wage bracket percentage method, and combined withholding tables are also found in this publication.

Publication 15-T should be used by employers in conjunction with the information in Publication 15 (Circular E), Employer's Tax Guide. Agricultural employers who use Publication 51 (Circular A), Agricultural Employer's Tax Guide, should also use these tables in lieu of the corresponding tables in Publication 51, and use Publication 15-T in conjunction with the information in Publication 51. Likewise, updated tables are included for Publication 15-A, Employer's Supplemental Tax Guide.

For the calculation of income tax withholding on pensions, the new withholding tables also apply.

These new tables have been developed due to changes to the tax law made in the American Recovery and Reinvestment Act of 2009. The IRS asks that employers begin using these tables in lieu of the applicable previously published tables as soon as possible, but no later than April 1, 2009.

Make the notice on page 73 available to employees so that they will be aware of how the new law affects their withholding. A copy of Form W-4, Employee's Withholding Allowance Certificate, is included on pages 71 and 72. Employees do not need to fill out a new Form W-4. These new tables have been developed to apply for withholding for all employees and to take into account all current tax provisions. Employees may submit a new Form W-4 to ensure that the correct amount of tax is being withheld from their pay.

In general, you must withhold federal income taxes on the wages of nonresident alien employees. However, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to this general rule. You must add an amount as set forth in the chart below to the nonresident alien's wages solely for calculating the income tax withholding for each payroll period. You determine the amount to be withheld by applying the income tax withholding tables to the amount of wages paid plus the additional chart amount. For more information, see Notice 2005-76, 2005-46 I.R.B. 947, available at
www.irs.gov/irb/2005-46_IRB/ar10.html.

As the new withholding tables were developed due to changes to the tax law made by the American Recovery and Reinvestment Act of 2009, the amount to add to a nonresident alien employee's wages for calculating income tax withholding only has been increased. See the chart below for these increased amounts.

The amount to be added to the nonresident alien's wages to calculate income tax withholding is set forth in the following chart.

The amounts added under this chart are added to wages solely for calculating income tax withholding on the wages of the nonresident alien employee. These chart amounts should not be included in any box on the employee's Form W-2, Wage and Tax Statement, and do not increase the income tax liability of the employee. Also, these chart amounts do not increase the social security, Medicare, or Federal Unemployment Tax Act (FUTA) tax liability of the employer or the employee.

This procedure only applies to nonresident alien employees who have wages subject to income tax withholding.

Effective March 2009, the monthly exclusion for combined commuter highway vehicle transportation and transit passes increases to $230 through December 2009. This increase is based on a change in the tax law made in the American Recovery and Reinvestment Act of 2009.