The Waterbury Democrat., 1943-05-26
REFUND FOR SOME
 TAXPAYERS SEEN
Sidebar Explains New Bill to Correct Erroneous Im=
 pressiOns of Many


 payers were reminded again today that even If the current pay-as- gou-go tax compromise becomes law there will be no perciptible change In the amount of taxes to be paid, no free" year of taxes - only a change in the method of payment.
 For example, it was reported that some taxpayers have the erroneous impression that 75 per cent forgive ness means that since they have paid one quarters tax on 1922 in- come they can just forget the other three quarters.
 On the contrary, under the NEA program, If adopted, taxpayers will pay as usual the June Is installment on their 1942 income tax. It and the one paid on March Is will be credited to the tax on 1943 income, taking care of the first half of the year in the ideal case. The last half of the tax on 1943 income will be collected through the 20 per cent withholding tax to start July 1. at the end of the year, the taxpayer will have to make up the difference between the amount already col iected and the amount due on actual earnings. Some taxpayers, of course will have refunds.
 Taxpayers owing not more than $50 tax in 1922 earnings would be relieved of paying anything for that year. Those who owed more than $50 would be forgiven 75 per cent of the total liability for the year and pay the remaining 25 per cent In two equal installments falling due March 15, 1914 and March 15, 1945. However, the payment made in March 15, 1943 and the one to be made June IS, 1943, would apply to 1943 taxes.
 GA special provision is being drafted to eliminate or reduce col lections on 1942 earnings from in- dividuals whose tax was above $50 but still not large enough to pay the cost of collecting the 25 per cent carry-over).
 Another special provision would make the 75 per cent forgiviness applicable to 1943 earnings if they are lower than 1942. Thus, the tax payer pays on his highest income of the two years in question. Still another special provision provides for heavier collections from indivi- duals whose 1942 or 1943 earnings are $20000 higher than for either 1888, 1889 or 1940, reflecting high war profits
 Collections on a current basis would start July l through a 20 per cent withholding tax, deducted from paychecks. Deductions start at all over $624 a year for a single person with no dependents and $1,- PAS for married persons with no de- pendents. An additional exemption of $312 a year is allowed for each dependent in either category.
 The 20 per cent deduction would pay ''le whole tax, however, only for individuals with a net income of not more than $2,000 after reduction of personal exemptions.
 Individuals with net income in excess of that figure would be re- quired to estimate the amount of difference and pay it in quarterly installments on current basis throughout the year.
 Non-Wage taxpayers, such as doc tors and lawyers and those whose income is derived from investments, would not be subject to the with holding tax but would be required to file estimates in advance and pay quarterly installments on the basis of those estimates.
 A final adjustment must be made by March 15 of the ensuing year. If it develops that the taxpayer has overpaid, he is entitled to a re- fund or credit on next years taxes. If he has underpaid he must make up the difference. The penalty is six per cent additional tax on the difference ebtWeen earnings and estimates which are more than 20 per cent in error.
 Farmers would not be required to file an income estimate until Dec Is of the taxable year. They are allowed up to B 1-3 per cent margin of error.
 Farm labor, domestics, clergymen and members of the armed services would be exempted from the with holding tax, but required to file es- inmates of income on the same basis as all other individuals. Such es- inmates would be required from all single taxpayers expecting to earn S35O0 or more, regardless of de- pendency status.
 Members of the armed services would be allowed $500 tax exemp- tion in addition to their regular in dividual exemptions. Thus, an un- married soldier as total tax ex- emption of 5000. A married soldier with no dependents has a total ex- -...aIIAxa nf @ 7Q0