Tax law changes for 2002. When you figure how much income tax you want withheld from your pay and when you figure your estimated tax for 2002, consider tax law changes effective in 2002. See Important Changes for 2002 in the front of this publication, or get Publication 553, Highlights of 2001 Tax Changes.

Certain withholding rates decreased. The withholding rates on the following items have been decreased.

1. Gambling winnings. The rate has decreased from 28% to 27%.
2. Unemployment compensation. The rate has decreased from 15% to 10%.
3. Federal payments. Withholding on certain federal payments is voluntary. The elective rates have been decreased to 7%, 10%, 15%, and 27%.
4. Backup withholding. The rate has decreased from 31% to 30%.
5. Supplemental wages. The rate has decreased from 28% to 27%.

Withholding on these items is discussed later in this chapter.

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