Evening star., 1956-07-30
CitytoMai|Book|ets
On Withholding Tax
PoyDeductions
For Residents
Sturt in October

Instruction booklets will be
mailed during the latter part
of August to some $4,000 em-
ployers in the District to pre-
pare them for Withholding city
income taxes from their em-
ployes' wages.
In general, every resident en-
ploye of the District is subject
to the withholding tax. beginning
on his first payday after Octo-
ber /.
Each employer will be required
to obtain an employers indenti-
f1cation number under the new
system. His instruction booklet
will include, in addition to the
explanation of the rules and the
tax tables. card for him to
mail in for his identification
number.
District officials anticipate
they may discover several thou
sand delinquent taxpayers when
the withholding begins. And q
taxpayer who has been liable
for city income taxes and has
not filed in previous years may
find himself tagged for three or
four years back. There is no
statute of limitations on failure
to file.
r. j. Durham, administrator
of the income and franchise tax
division, said his Office has as
seSSed an average of 500 from
delinquent taxpayers discovered
last year. Many taxpayers here
apparently consider themselves
residents of other States and
not subject to District income
taxes.
Must Prove Case
/ With the withholding tax, they
will be required to prove to the
city that they are not subject to
withholding. Primarily. military
personnel and legislative en-
ployes are exempt.
1t is estimated that between
200, 900 and 250,000 persons here
now are subject to city income
taxes. The average tax paid by
residents in 1855 was Silt.
Mr.. Dunham noted that en-
actment of the law authorizing
withholding last March. at the
same time increasing the tax
rate in the upper brackets, al
ready has had the effect of moti-~
waiting an estimated 10000 per-
sons to file returns for the first
time last April Is.
/ The new law lowers the basic
tax exemption from $4,000 to
81 900 for a single person, and to
$4,000 for married couples. Pre-
viously, married man received
$4,000 exemption and $500 for
his wife.
Some 10000 to 10000 resi-
dents obliged to file returns
under the lowered exemptions
might not have done so without
the withholding authorization,
Mr.. Dunham estimated.
Form for NOnresidentS
Employers will supply the city
with the names of their District
resident employees. Employees
who claim to be nonresidents
will have to fill out a form so
certifying, which will be kept on
file by the employers.
Employees living and working
regularly in the District will have
District as we'll as Federal in
come taxes deducted from their
pay. Federal employees living in
the District. but regularly work.
ing outside the District Will not
have District income taxes With
held. They will be obliged to
file a declaration of estimated
taxes. however. and pay any
taxes due.
Non-District employers Who
do business in Washington are
considered obliged to withhold
District income taxes of their
employees who live in the city.
The new income tax rates 60
up from the present 4 per cent
on taxable income over $4,000
to AZ per cent on the poi ton
from $4,000 to $25,0G0 and S
per cent on additional taxable
: income.
1t is estimated the new law
: will bring the District S3.4 mil
!. lion more revenue this fiscal
! year, and $5.3 million more a
year after that.
Declaration Excused
In adopting the regulations to
carry out the new withholding
, law, the Commissioners last
week decided to excuse residents
from filing the declaration of
estimated tax for 1856 which
, would have been due October is.
J I'his due date was extended to
, April Is. at which time the tax
, payer may make his final return
for 1856 and forget about the
estimate.
!. In future years. however, the
taxpayer who expects to have
taxable income not subject to
withholding or exceeding the
amount subject to withholding
Will have to file his declaration
OF estimated tax similar to that
required by the Federal Govern
ment and pay at least quarterly.
The new law provides that city
residents will be forgiven one
half their 1856 taxes. For ex-
ample. a resident who owed $lOO
for 1856 might have S25 Of n
withheld from October TO the
end OF the year. That would
leave SIS owing. but when he de-
Quoted half the SlO0, or $50. he
would owe SIS on April is.
Under the change in the basic
exemption, husband, wife and
two children with an income of
$1,000 who paid $25 under the
previous law would pay S87 so
under the new law. Under the