41 CFR 302-17.1 - Authority.

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§ 302-17.1 What special terms apply to this part?

The following definitions apply to this part:

Allowance means:

(1) Money paid to the employee to cover future expenses, such as the miscellaneous expense allowance (see part 302-16 of this chapter for information about the miscellaneous expense allowance);

(2) Money paid to the employee to cover past expenses, such as the relocation income tax allowance (RITA) under the two-year tax process described in Part 302-17, Subpart G; or

(3) A limit established by statute or regulation, such as the 18,000 pound net weight allowance for household goods shipments (see Part 302-7 of this chapter for information about the 18,000 pound net weight allowance).

City means any unit of general local government as defined in 31 CFR 215.2(b).

Combined marginal tax rate (CMTR) means a single rate determined by combining the applicable marginal tax rates for Federal, state, and local income taxes, using the formula provided in § 302-17.40. (If you incur liability for income tax in the Commonwealth of Puerto Rico, see § 302-17.44.)

County means any unit of local general government as defined in 31 CFR 215.2(e).

Gross-up used as a noun in this part means:

(1) The process that your agency uses to estimate the additional income tax liability that you incur as a result of relocation benefits and taxes on those benefits; or

(2) The result of the gross-up process.

Note:

The gross-up allows for the fact that every reimbursement of taxes is itself taxable. Therefore, the gross-up calculates the amount an agency must reimburse an employee to cover substantially all of the income taxes incurred as the result of a relocation.

Internal Revenue Code (IRC) means Title 26 of the United States Code, which governs Federal income taxes.

Local income tax means a tax imposed by a recognized city or county tax authority that is deductible for Federal income tax purposes as a local income tax under the IRC, at 26 U.S.C. 164(a)(3). (See the definitions for the terms city and county in this section.)

Marginal tax rate (MTR) means the tax rate that applies to the last increment of taxable income after taxable relocation benefits have been added to the employee's income. For example, suppose a married employee who files jointly has a taxable income of $120,000. According to the IRS 2011 Tax Rate Schedules, taxable income between $69,000 and $139,350 is taxed at the 25 percent tax rate; therefore, the $120,000 taxable income of the employee and spouse is in this range, so they have a 25 percent MTR. If the employee receives $30,000 of taxable relocation benefits, the taxable income for the employee and spouse is now $150,000, which is in the next highest tax bracket. In this example, the employee and spouse now have a Federal MTR of 28 percent once the taxable relocation benefits have been added to their income.

Reimbursement means money paid to you to cover expenses that you have already paid for out of your own funds.

Relocation benefits means all reimbursements and allowances that you receive, plus all direct payments that your agency makes on your behalf, in connection with your relocation.

Relocation income tax allowance (RITA) means the payment to the employee to cover the difference between the withholding tax allowance (WTA), if any, and the actual tax liability incurred by the employee as a result of their taxable relocation benefits; RITA is paid whenever the actual tax liability exceeds the WTA.

State means any one of the several states of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, or any other territory or possession of the United States.

State income tax means a tax imposed by a state tax authority that is deductible for Federal income tax purposes under the IRC, specifically 26 U.S.C. 164(a)(3).

Withholding tax allowance (WTA) means the amount paid to the Federal IRS by the agency as withholding of income taxes for any taxable relocation allowance, reimbursement, or direct payment to a vendor.

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.


United States Code
U.S. Code: Title 5 - GOVERNMENT ORGANIZATION AND EMPLOYEES
U.S. Code: Title 20 - EDUCATION
Presidential Documents

Executive Order ... 11609