What are your thoughts on why they are only withholding 22% taxes on the AICP and allowing employees to adjust that? In prior years they have always withheld over 30% and NEVER allowed employees an adjustment.
4 replies (most recent on top)
Your lucky. In Canada.... Ford takes 54% of our AICP Bonus for Canadian taxes!
Keep in mind that most people on this site don't understand the difference between tax rate and withholding rate, so your answers will vary. Even the bankrate article linked here misuses the terms. Personally, I like having control over the withholding amount so I can tailor it to my predicted tax situation. It may be risky for some to drop to 22% withholding though as depending on your tax situation it could cause you to owe more at tax filing time.
It is always 22% federal. However factor in 7.65% fur FICA and Medicare, and state, you get close to 35% total.
Ford has nothing to do what how the AICP is taxed. It is the IRS who determines how it is taxed.
https://www.bankrate.com/taxes/how-bonuses-are-taxed/