The Internal Revenue Service (IRS) has announced the annual inflation adjustments for the year 2020, including tax rate schedules, tax tables and cost-of-living adjustments. Supplemental Tax Rates Federal Unemployment Tax Act (FUTA) Social Security – taxable earnings $137,700 (increased from 2019) Social Security – maximum paid by employee $8,537.40 (increased from 2019) Medicare tax rate – first $200,000 in employee wages 1.45% (unchanged) Medicare tax rate – after $200,000 in employee wages* 2.35% (unchanged) The state supplemental income tax withholding rates currently available for 2020 are shown in the chart below. The first $1 million is subject to the 22% withholding rate that applies to bonuses and supplemental wages paid in the 2020 tax year. If you’re in the 33% tax bracket and you receive a bonus of $100,000, you will pay $33,000 in federal taxes. Nearly 850,000 payments with a total value of $1.6 billion went to individuals for whom the IRS previously did not have information but filed a 2020 tax return, according to the IRS statement. January 6, 2020 2020-0021. 2020 Supplemental Tax Reporting Information 00251576 JANUARY 2021 foreign source income supplemental information Although the IRS no longer requires a country-by-country breakdown of foreign source income passed through from a mutual fund, the following table provides this information. Just like that, your bonus shrinks to $1.28 million because $220,000 goes to the IRS right off the top. For purposes of calculating Calculating your actual bonus tax rate in a typical tax year isn’t that hard. In a Wednesday news release, the IRS confirmed that it sent out over 1 million supplemental payments to people whose 2020 tax returns qualified them for additional funds this week. Do not use this overview to figure your tax. State supplemental income tax withholding rates for 2020. Similar to the federal supplemental income tax withholding rate, most states also allow for an optional flat percentage of income tax withholding for wages that are in addition to regular pay. The IRS has released its final version of the 2020 Publication 15 (aka Circular E) Employer's Tax Guide; Publication 15-A, Employer's Supplemental Tax Guide; Publication 15-B (Employer's Tax Guide to Fringe Benefits); and Publication 15-T, Federal Income Tax Withholding Methods. If you’re fortunate enough to receive more than $1 million in supplemental wages, any amount over $1 million is taxed at a higher rate, which is 37% in 2020. Tax Credits and Deductions; Local Tax Rate Chart; Maryland Income Tax Rates and Brackets. Your bonus is taxed at the same rate as all of your other income. How to calculate your supplemental wages bonus tax rate. The chart shown below outlining the 2020 Maryland income tax rates and brackets is for illustrative purposes only. Your employer also will deduct Social Security and Medicare taxes, as well as any state income taxes, regardless of how much federal income tax is withheld.