Getting tax cut now tricky

• By MICHELLE MILLHOLLON
• Advocate Capitol News Bureau
• Published: Aug 15, 2008 - Page: 1A - UPDATED: 12:05 a.m.

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Taxpayers who want to benefit immediately next year from a $359 million state income tax break will need a calculator.

For seven months beginning in January, employees and employers will have to manually calculate how much money to withhold from paychecks until state officials revise withholding tables next summer.

The maximum gain from the tax break is $500 on single returns for filers with a federally adjusted gross income of at least $100,000.

“It’s a matter of will you take the time to go do it,” House Speaker Jim Tucker said Thursday. “It’s doable.”

The tax break — a shift in the percent at which some income is taxed — takes effect Jan. 1, prompting Gov. Bobby Jindal to promise fatter paychecks at the beginning of 2009.

However, the state Department of Revenue will not change the withholding tables until July 2009. The tables tell employers how much money to withhold from workers’ paychecks.

During the recent session, Tucker, R-Terrytown, tacked the amendment onto the tax break legislation that prevents the Revenue Department from changing the tables earlier than July 2009. The delay meant lawmakers did not have to absorb a loss in state government revenue in the current  operating budget for the fiscal year that began July 1.

Radio talk show host Moon Griffon urged listeners to call Tucker on Thursday and protest.

Tucker estimates he got about a dozen calls.

Griffon said he spent hours with accountants trying to determine how taxpayers can reap the benefits of the tax break in January. He said he concluded that taxpayers will not see savings until they fill out their income tax returns in 2010.

“It was a slick move to tell people they’re going to get it back,” he said.

The only solution, Griffon said, is for the governor to call a special session to ensure an immediate return on the tax break.

Early in the day Thursday, revenue department officials agreed with Griffon that the tax savings will likely appear in 2010.