Question

curtis just received a raise at work increasing his salary by $8,500. he knows that an increase in salary will increase the amount of federal income taxes withheld from his paycheck. which of the following statements best describes the effect his raise will have on state income tax withholdings?
a. state income tax is unrelated to federal, he will see no change in his state withholding.
b. since he is having more withheld for federal, he will have less withheld for state so that he pays the same amount in the end.
c. state income tax is usually a set percentage of federal income tax. with an increase in federal he will see an increase in withholding.
d. since he is making more money, the state government will take advantage of his raise and charge him more income tax. his state withholding will increase.
please select the best answer from the choices provided

Explanation:

To determine the correct answer, we analyze each option:

• Option a: State and federal income taxes are related (both based on income), so this is incorrect.
• Option b: An increase in salary (income) typically leads to more state tax withholding, not less, so this is incorrect.
• Option c: State income tax is not a set percentage of federal income tax; state tax has its own calculation based on state - specific rules, so this is incorrect.
• Option d: When income (salary) increases, since state income tax is based on income, the state government will withhold more (as tax is a percentage of income, higher income means higher tax owed, so more withholding). This is correct.

Answer:

d. Since he is making more money, the state government will take advantage of his raise and charge him more income tax. His state withholding will increase.