Calculating Available Deductions

For employees associated with the state territory, the third step in the IRPF calculation is the calculation of deductions.

Note:

This step does not apply to employees associated with any of the historical territories.

The system calculates the ART18 reduction, the personal minimum reduction, and the familiar minimum reduction.

The ART18 reduction is based on income level, disability, geographical mobility, and worklife extension. The system compares both values to ranges in the system to determine the reduction amounts using the formula TAX FM RD ART 18.

The personal minimum reduction is based on age and disability. The system compares both values to values in the system to determine the reduction amounts using the formula TAX FM RD MN PERS.

The familiar minimum reduction is based on dependents, both children and adults. The system considers the total number of dependents, their ages, their degree of disability, and their level of dependency on the employee. The system calculates these deductions using the formula TAX FM RD MN FAML. The system uses the formula TAX FM FAM NUM to calculate the reduction when a payee has more than two descendants.

The system also calculates a reduction for spouse support garnishments using the array TAX AR RET JUDIC.