§ 301-11.535 - How should we calculate the ITRA?

(a) Use the documents prescribed in §301-11.531 to calculate the ITRA as follows:

(1) 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 the appropriate RIT tax table(s) located at www.gsa.gov/ftrbulletin; and

(2) Add any penalty or interest for tax years 1993 or 1994 only to determine the full ITRA payment; or

(b) As calculated in the following illustration.

Example of calculating an employee's tax return using the marginal tax rate schedules in the state RIT tax table(s) located at www.gsa.gov/ftrbulletin:

For Tax Years 1993 or 1994 (Married Filing Joint Return)

	Original	Recalculated
1. Adjusted Gross Income (w/ travel reimbursement)	$75,246	$75,246
2. Subtract travel reimbursement		(15,482)
3. Subtract personal exemptions and itemized or standard deductions	(12,689)	(12,689)
4. Adjusted taxable Income	62,557	47,075
5. Tax liability on adjusted taxable income:
a. Federal	17,516 (28%)	$7,061* (15%)
b. State, VA (5.75% tax bracket)	3,597	2,707
c. Local: Not applicable	0	0
d. Total	21,113	9,768
6. Difference of total of column 1 minus total of column 2:
Additional Taxes Incurred due to travel reimbursement—$11,345
7. Add to the tax difference:
a. Penalty Payment imposed by IRS tax year 1993—1,500
b. Interest Payment imposed by IRS tax year 1993—1,500
Total 6 and 7a and b = ITRA—$14,345**

*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.

[64 FR 32813, June 18, 1999, as amended by FTR Amdt. 2008-04, 73 FR 35953, June 25, 2008]