To: All Faculty & All Academic Professionals & All Civil Service Staff
           <everybody@illinois.edu> 
    From: "Kral, Katharine" <kkral@uiuc.edu>

Reply-To: tpalumbo@uiuc.edu
 Subject: MASSMAIL - TAX WITHHOLDING CHANGES

TAX WITHHOLDING CHANGES


As a result of the enactment of the recent tax relief legislation, you may 
see a reduction in your payroll Federal tax withholding rates beginning 
July 1, 2001.  If you do not wish to take advantage of the new rates, you 
must file a new W-4 form.  You may file this form using NESSIE, the 
University's Web site for conducting personnel transactions, or by coming 
to the Payroll Office.  NESSIE is available at 
http://nessie.uihr.uillinois.edu/.  The Payroll Office is located in room 
100A of the Henry Administration Building.

The Economic Growth and Tax Relief Reconciliation Act becomes effective 
July 1, 2001, and impacts all wages paid after June 30, 2001.  It lowers 
individual income tax rates, includes provisions to extend the income 
exclusion for employer-provided educational assistance, increases the basis 
for earned income credit beginning in 2002, and reduces the percent charged 
on supplemental wage payments.

The Act extends the income exclusion of $5,250 for employer-provided 
educational assistance to graduate level courses effective January 1, 2002.  
It also makes this income exclusion (for both undergraduate and graduate 
level courses) permanent.  In the past, this had been a temporary provision 
of the tax code.   Employees who take graduate level courses in the fall 
semester of the 2001-2002 academic year will still be taxed on the value of 
their fall tuition.  

If you have questions concerning the tax changes, please call the Payroll 
Office at 333-2443.
 
Katharine J. Kral
Assistant Vice President 
  for Business and FinanceThis mailing approved by:
The Office of the Vice Chancellor for Administration & HR

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