Collection of Income Tax at Source; Withholding

  1. Law
  2. Georgia Code
  3. Revenue and Taxation
  4. Income Taxes
  5. Current Income Tax Payment
  6. Collection of Income Tax at Source; Withholding

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  1. Wages subject to withholding. The amount of wages subject to withholding shall be the amount of each wage payment less the total withholding exemption allowance applicable to the wage payment as computed under subsection (b) of this Code section and less the standard deduction allowance applicable to the wage payment, determined according to the payroll period and marital status of the employee as follows:
  2. Withholding exemption allowance.
    1. The withholding exemption allowance applicable to a wage payment to an employee, determined according to the payroll period of the employee, shall be the amount shown in Column 1, below, or the amount shown in Column 2, below, as the withholding exemption status of the employee may be, plus the amount shown in Column 3, below, multiplied by the number of dependency exemptions claimed by the employee.
    2. If wages are paid for a miscellaneous payroll period or with respect to a period which is not a payroll period, the withholding exemption allowance with respect to each payment of wages shall be the exemption allowed for a daily payroll period multiplied by the number of days in the period including, but not limited to, Saturdays and Sundays, with respect to which the wages are paid.
    3. In any case in which wages are paid by an employer without regard to any payroll period or other period, the withholding exemption allowance with respect to each payment of wages shall be exemption allowance for a daily payroll period multiplied by the number of days, including but not limited to, Saturdays and Sundays, which have elapsed since the last payment of wages by the employer during the calendar year, since the date of commencement of employment with the employer during the year, or since January 1 of the year, whichever is later.
  3. Requirement of withholding. Every employer making payments of wages shall deduct and withhold from the wages a tax computed in such manner as to result, so far as practicable, in withholding from the employee's wages during each calendar year an amount substantially equivalent to the income tax reasonably estimated to be due for the calendar year as a result of including the employee's wages received during the calendar year in the employee's Georgia adjusted gross income. The method of determining the amount to be withheld shall be prescribed by regulations of the commissioner, with due regard for the withholding exemption allowances of the employee provided in this Code section and the sum of any credits allowable against his tax.
  4. Other employer plans. Upon application by an employer and under conditions the commissioner deems proper, the commissioner may approve any plan of withholding developed by an employer to produce, insofar as practicable, the tax required to be withheld under the regulations prescribed by the commissioner under subsection (c) of this Code section. Any plan authorized under this subsection shall be in lieu of the tax required to be deducted and withheld under the regulations prescribed by the commissioner.
  5. Included and excluded wages. If the remuneration paid by an employer to an employee for services performed during one-half or more of any payroll period of not more than 31 consecutive days constitutes wages, all the remuneration paid by the employer to the employee for the period shall be deemed to be wages. If the remuneration paid by an employer to an employee for services performed during more than one-half of any payroll period of not more than 31 consecutive days does not constitute wages, then none of the remuneration paid by the employer to the employee for the period shall be deemed to be wages.
  6. Unusual cases. The commissioner may promulgate regulations for withholding in unusual cases, including the following:
    1. To authorize an employer to estimate the wages which will be paid to an employee in any quarter of the calendar year and to determine the amount to be deducted and withheld upon each payment of wages to the employee during the quarter as if the appropriate average of the wages so estimated constituted the actual wages paid;
    2. To authorize the employer to deduct and withhold from any payment of wages to an employee during a quarter the amount necessary to adjust the amount actually deducted and withheld during the quarter to the amount required to be deducted and withheld during the quarter if the payroll period of the employee were quarterly;
    3. To authorize an employer to deduct and withhold an amount in addition to that otherwise required to be withheld under this article in cases in which the employer and the employee agree to the additional withholding. The additional withholding shall for all purposes be considered tax required to be deducted and withheld under this article;
    4. To authorize an employer to deduct from wages, before withholding and deducting tax, any amount attributable to travel and other necessary business expenses of employees who are not reimbursed by the employer for the expenses and whose duties require such expenditures, other than traveling to and from the employee's home and place of employment;
    5. To prescribe the manner and extent to which withholding tax shall apply to extra payments to employees for services rendered, including, but not limited to, bonuses, separation pay, and year-end Christmas, or birthday payments and to authorize, under such conditions as the commissioner deems proper, an employer to compute the tax to be withheld from the payments so as to make adjustments to the annual wages which the employer may pay to the employee. No withholding shall be required with respect to a Christmas payment or a birthday payment to an employee when the amount of the payment is not in excess of $100.00;
    6. To prescribe the manner and extent to which withholding tax shall apply to unusual payments of wages; and
    7. To prescribe the manner and extent to which withholding tax shall apply to the proceeds of any lottery prize of $5,000.00 or more awarded by the Georgia Lottery Corporation.
  7. Employees incurring no income tax liability.
    1. An employer is not required to deduct and withhold any tax under this article from a payment of wages to an employee if there is in effect with respect to the payment a withholding exemption certificate furnished to the employer by the employee certifying that the employee:
      1. Incurred no liability for income tax under this chapter for his preceding taxable year; and
      2. Anticipates that he will incur no liability under this chapter for income tax for his current taxable year.
    2. The withholding exemption certificate for use as provided in this subsection shall be in the form and shall contain such information as required by the commissioner.
  8. Withholding requirements for periodic payments.
    1. The payor of any periodic payment as defined in paragraph (8.1) of Code Section 48-7-100 shall withhold from such payment the amount which would be required to be withheld if such payment were a payment of wages by an employer to an employee for the appropriate payroll period.
    2. The payee of any periodic payment may elect to have paragraph (1) of this subsection not apply with respect to periodic payments made to such payee.Such an election shall remain in effect until revoked by the payee.
    3. The commissioner is authorized to prescribe forms and to promulgate rules and regulations setting forth the requirements for withholding from such periodic payments and the requirements for making elections not to withhold.
  9. Form 1099 withholding and reporting.
    1. A withholding agent shall be required to withhold state income tax at the rate of 6 percent of the amount of compensation paid for labor services as defined in paragraph (3) of Code Section 48-7-21.1 to an individual, which compensation is reported on Form 1099 and with respect to which the individual has:
      1. Failed to provide a taxpayer identification number;
      2. Failed to provide a correct taxpayer identification number. Except as to the withholding rate specified in this paragraph, such failure shall be determined in the same manner as provided for in Section 3406 of the Internal Revenue Code and regulations thereunder; or
      3. Provided an Internal Revenue Service issued taxpayer identification number issued for nonresident aliens.
    2. Any withholding agent who fails to comply with the withholding requirements of this subsection shall be liable for the taxes required to have been withheld unless such withholding agent is exempt from federal withholding with respect to such individual pursuant to a properly filed Internal Revenue Service Form 8233 and has provided a copy of such form to the commissioner.
    1. The payee of any nonperiodic payment may elect to have withholding made on distributions from a pension, annuity, or similar fund. Such an election shall remain in effect until revoked by the payee.
    2. Upon such election by a payee as provided in paragraph (1) of this subsection, the payor of any nonperiodic payment shall withhold from such payment the amount specified by the payee, but in no event shall the amount withheld be less than the amount which would be required to be withheld if such payment were a payment of wages by an employer to an employee for the appropriate payroll period.
    3. The commissioner shall be authorized to prescribe forms and to promulgate rules and regulations setting forth the requirements for withholding from such nonperiodic payments and the requirements for making elections to withhold.

Married Married Filing Filing Payroll Period Jointly Single Separately -------------- ------- ------ ---------- Weekly $ 57.50 $ 44.25 $ 28.75 Biweekly 115.00 88.50 57.50 Semimonthly 125.00 95.75 62.50 Monthly 250.00 191.50 125.00 Quarterly 750.00 575.00 375.00 Semiannual 1,500.00 1,150.00 750.00 Annual 3,000.00 2,300.00 1,500.00 Daily or Miscellaneous 8.20 6.30 4.10

Col. 1 Col. 2 Col. 3. Single Marital Each Dependent Payroll Period Exemption Exemption Exemption -------------- --------- --------- --------- Weekly $ 51.92 $ 103.85 $ 51.92 Biweekly 103.85 207.69 103.85 Semimonthly 112.50 225.00 112.50 Monthly 225.00 450.00 225.00 Quarterly 675.00 1,350.00 675.00 Semiannual 1,350.00 2,700.00 1,350.00 Annual 2,700.00 5,400.00 2,700.00 Daily or Miscellaneous 7.40 14.79 7.40

(Ga. L. 1960, p. 7, § 3; Ga. L. 1972, p. 1195, § 1; Ga. L. 1979, p. 926, § 1; Code 1933, § 91A-3902, enacted by Ga. L. 1978, p. 309, § 2; Ga. L. 1979, p. 926, § 2; Ga. L. 1987, p. 191, § 5; Ga. L. 1988, p. 1390, §§ 1, 2; Ga. L. 1992, p. 1296, § 2; Ga. L. 1994, p. 361, § 1; Ga. L. 1994, p. 381, § 3; Ga. L. 1994, p. 595, § 2; Ga. L. 1998, p. 1, § 3; Ga. L. 2006, p. 105, § 8/SB 529; Ga. L. 2007, p. 271, § 6/SB 184; Ga. L. 2008, p. 898, § 11/HB 1151.)

Editor's notes.

- Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, provides that this Act is applicable to taxable years ending on or after March 11, 1987, and that a taxpayer with a taxable year ending on or after January 1, 1987, and before March 11, 1987, may elect to have the provisions of that Act apply.

Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, also provided that tax, penalty, and interest liabilities and refund eligibility for prior taxable years shall not be affected by that Act.

Ga. L. 1987, p. 191, § 10, not codified by the General Assembly, also provided that provisions of the federal Tax Reform Act of 1986 and of the Internal Revenue Code of 1986 which as of January 1, 1987, were not yet effective become effective for purposes of Georgia taxation on the same dates as they become effective for federal purposes.

Ga. L. 1994, p. 361, § 2, not codified by the General Assembly, makes paragraph (f)(7) of this Code section applicable to all taxable years beginning on or after January 1, 1994.

Ga. L. 1994, p. 595, § 3, not codified by the General Assembly, makes subsection (h) of this Code section applicable to all taxable years beginning on or after January 1, 1994.

Ga. L. 1998, p. 1, § 4, not codified by the General Assembly, makes paragraph (b)(1) of this Code section applicable to all taxable years beginning on or after January 1, 1998.

Ga. L. 2006, p. 105, § 1/SB 529, not codified by the General Assembly, provides: "This Act shall be known and may be cited as the 'Georgia Security and Immigration Compliance Act.' All requirements of this Act concerning immigration or the classification of immigration status shall be construed in conformity with federal immigration law."

Ga. L. 2008, p. 898, § 13/HB 1151, not codified by the General Assembly, provides, in part, that the amendment to this Code section shall be applicable to all taxable years beginning on or after January 1, 2008.

Administrative Rules and Regulations.

- Returns and collections, Official Compilation of the Rules and Regulations of the State of Georgia, Department of Revenue, Income Tax Division, Chapter 560-7-8.

Law reviews.

- For review of 1998 legislation relating to revenue and taxation, see 15 Georgia St. U.L. Rev. 217 (1998). For article, "The Georgia Security and Immigration Compliance Act: Comprehensive Immigration Reform in Georgia - 'Think Globally ... Act Locally'," see 13 Ga. St. B. J. 14 (2007). For note on the 1992 amendment of this Code section, see 9 Georgia St. U.L. Rev. 338 (1992). For note on the 1994 amendment of this Code section, see 11 Georgia St. U.L. Rev. 255 (1994).

OPINIONS OF THE ATTORNEY GENERAL

Treatment of employee's unrestricted subsistence allowance.

- Unrestricted subsistence allowance, that is, an allowance which is in no wise limited to expenditures incurred on account of the employee's business, is an allowance to defray the employee's personal living expenses and is, in substance, a form of compensation or remuneration within the scope of former Code 1933, § 92-3107 and the definition of "wages" in Ga. L. 1960, p. 7. To the extent that an employee incurs expenses on account of the business of the employer, and the employee is not otherwise reimbursed therefor, so that such expenses are a charge against this subsistence allowance, then the situation is one to be handled under regulations of the commissioner promulgated in accordance with Ga. L. 1960, p. 7. 1960-61 Op. Att'y Gen. p. 506.

RESEARCH REFERENCES

Am. Jur. 2d.

- 71 Am. Jur. 2d, State and Local Taxation, § 476.

C.J.S.

- 85 C.J.S., Taxation, §§ 2075, 2076, 2077.

ALR.

- Construction and application of state corporate income tax statutes allowing net operation loss deductions, 33 A.L.R.5th 509.


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