41 C.F.R. § 301-11.635 How should we calculate the ITRA?
Title 41 - Public Contracts and Property Management
Use the documents prescribed in §301–11.631 to calculate the ITRA as follows: (a) Determine Federal, State and local marginal tax rates by using the procedures and the marginal tax tables established for the relocation income tax allowance in §302–11.7, §302–11.8 and Appendices A, B, C and D to part 302–11 of this title, or (b) As calculated in the following illustration.
Example of calculating an employee's tax return using the marginal tax rate schedules in Appendix B to part 302–11 of this title:
Title 41: Public Contracts and Property Management
PART 301–11—PER DIEM EXPENSES
Subpart F—Income Tax Reimbursement Allowance (ITRA), Tax Years 1995 and Thereafter
Agency Responsibilities
§ 301-11.635 How should we calculate the ITRA?
For Tax Year 1995 and Thereafter [Married Filing Joint Return]------------------------------------------------------------------------ Original Recalculated------------------------------------------------------------------------1. Adjusted Gross Income (w/ travel $75,246 $75,246 reimbursement):........................2. Subtract travel reimbursement:....... .............. (15,482)3. Subtract personal exemptions and (12,689) (12,689) itemized or standard deductions........4. Adjusted taxable income.............. 62,557 47,0755. Tax liability on adjusted taxable income: a. Federal (28%).................... 17,516 *7,061 (15%) b. State, VA (5.75% tax bracket).... 3,597 2,707 c. Local: Not applicable............ 0 0 ------------------------------- d. Total............................ 21,113 9,7686. Difference of total of column 1 minus total of column 2: Additional Taxes Incurred due to travel reimbursement_$11,345Total = ITRA_$11,345**------------------------------------------------------------------------*Adjusted taxable income places employee in lower tax bracket.**The ITRA reimbursement is taxable income for the year in which paid at the appropriate Federal, State and local income tax rates.
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