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American Payroll Association (APA) Basic Guide to Payroll, 2013 Edition
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CCH® PAYROLL — 7/12/12

D.C. budget law has some payroll items

The District of Columbia has enacted the Fiscal Year 2013 Budget Support Act of 2012, which contains provisions affecting personal income tax withholding, the personal income tax rate for high-income earners, and the threshold for electronic funds transfer for corporate income and other nonindividual taxpayers.

Retirement withholding. The budget support legislation requires that tax be withheld at the highest District individual income tax rate that is in effect at the time a resident payee receives a payment from a retirement plan or account that is a lump-sum distribution. Withholding is not required from: any portion of a lump-sum payment that was previously subject to tax; an eligible rollover distribution that is effected as a direct trustee-to-trustee transfer; or a rollover from an individual retirement account to a traditional or Roth individual retirement account that is effected as a direct trustee-to-trustee transfer.

Income tax rates. Rate Change for High-Wage Earners For taxable years beginning after December 31, 2011, if taxable income is over $350,000, the tax is $28,550, plus 8.95% of the excess above $350,000. This provision expires as of January 1, 2016.

Electronic funds transfers. Nonindividual taxpayers can be required to make payments electronically if the amount of the payment due for a period exceeds $5,000 (previously $10,000). (Act 19-385 (D.C.B. 19-743), Laws 2012, approved June 22, 2012, effective after a 30-day congressional review period.)

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