Pub. L. 84-460, tit. I, sec. 11

Sec. 11. Section 8 of title XII of said Act (D. C. Code, sec. 47–1586g) is amended by inserting “(a)” after “Sec. 8.” and by adding at the end thereof the following new subsections: “(b) Withholding of Tax by Employer.— Every employer making payment of wages on or after October 1, 1956, to any employee as defined in this article, shall deduct and withhold a tax upon such wages, such tax to be determined by one of the following methods, to be elected by the employer, subject to the approval of the Assessor, with respect to any employee— 70 Stat. 73 in accordance with a percentage method of withholding similar in principle to that under section 3402 of the Internal Revenue Code of 1954, to be included in regulations; in accordance with tables similar in principle to those contained in section 3402 of the Internal Revenue Code of 1954, to be included in regulations; in accordance with a percentage of the amount of tax withheld under section 3402 of the Internal Revenue Code of 1954, or comparable provision in effect at the time with respect to the withholding of United States income tax, such percentage to be included in regulations; or by such other method as may be prescribed in regulations. “(1) If wages are paid with respect to a period which is not a payroll period, the amount to be deducted and withheld shall be that applicable in the case of a miscellaneous payroll period containing a number of days, including Sundays and holidays, equal to the number of days in the period with respect to which such wages are paid. “(2) In any case in which wages are paid by an employer without regard to any payroll period or other period, the amount to be deducted and withheld shall be that applicable in the case of a miscellaneous payroll period containing a number of days equal to the number of days (including Sundays and holidays) which have elapsed since the date of the last payment of such wages by such employer during the calendar year, or the date of commencement of employment with such employer during such year, or January 1 of such year, whichever is the later. “(3) In determining the amount to be deducted and withheld under this section the wages may, at the election of the employer, be computed to the nearest dollar. “(4) The Commissioners may, by regulations, authorize employers— “(A) to estimate the wages which will be paid to any employee in any quarter of the calendar year; “(B) to determine the amount to be deducted and withheld upon each payment of wages to such employee during such quarter as if the appropriate average of the wages so estimated constituted the actual wages paid; and “(C) to deduct and withhold upon any payment of wages to such employee during such quarter such amount as may be necessary to adjust the amount actually deducted and withheld upon the wages of such employee during such quarter to the amount that would be required to be deducted and withheld during such quarter if the payroll period of the employee were quarterly. “(5) The Commissioners are authorized to provide by regulation, under such conditions and to such extent as they deem proper, for withholding in addition to that otherwise required under this section in cases in which the employer and the employee agree to such additional withholding. Such additional withholding shall for all purposes be considered the tax required to be deducted and withheld under this section. “(c) Overlapping Pay Periods.—If payment of wages is made to an employee by an employer— “(1) with respect to a payroll period or other period, any part of which is included in a payroll period or other period with respect to which wages are also paid to such employee by such employer; “(2) without regard to any payroll period or other period, but on or prior to the expiration of a payroll period or other period with respect to which wages are also paid to such employee by such employer; 70 Stat. 74 “(3) with respect to a period beginning in one and ending in another calendar year; or “(4) through an agent, fiduciary, or other person who also has the control, receipt, custody, or disposal of, or pays the wages payable by another employer to such employee, the manner of withholding and the amount to be deducted and withheld under this section shall be determined in accordance with regulations promulgated by the Commissioners under which the withholding exemption allowed to the employee in any calendar year shall approximate the withholding exemption allowable with respect to an annual payroll period. “(d) Included and Excluded Wages.—If the remuneration paid by an employer to an employee for services performed during one-half or more of any payroll period of not more than thirty-one consecutive days constitutes wages, all the remuneration paid by such employer to such employee for such period shall be deemed to be wages; but if the remuneration paid by an employer to an employee for services performed during more than one-half of any such payroll period does not constitute wages, then none of the remuneration paid by such employer to such employee for such period shall be deemed to be wages. “(e) Withholding Exemptions.—(1) An employee receiving wages shall on any day be entitled to the withholding exemptions allowed under this article. “(2) Every employee shall, on or before October 1, 1956, or before the date of commencement of employment, whichever is later, furnish his employer with a signed withholding exemption certificate relating to the withholding exemptions which he claims, which in no event shall exceed the number to which he is entitled. “(3) Withholding exemption certificates shall take effect as of the beginning of the first payroll period ending, or the first payment of wages made without regard to a payroll period, on or after the date on which such certificate is so furnished: Provided, That certificates furnished before October 1, 1956, shall be considered as furnished on that date. “(4) A withholding exemption certificate which takes effect under this section shall continue in effect with respect to the employer until another such certificate takes effect under this section. If a withholding exemption certificate is furnished to take the place of an existing certificate, the employer, at his option, may continue the old certificate in force with respect to all wages paid on or before the first status determination date, January 1 or July 1 of each year, which occurs at least thirty days after the date on which such new certificate is furnished. “(5) If, on any day during the calendar year, the withholding exemptions to which the employee may reasonably be expected to be entitled at the beginning of his next taxable year is different from the exemptions to which the employee is entitled on such day, the employee shall in such cases and at such times as the Commissioners may prescribe, furnish the employer with a withholding exemption certificate relating to the exemptions which he claims with respect to such next taxable year, which shall in no event exceed the exemptions to which he may reasonably be expected to be so entitled. Exemption certificates issued pursuant to this subsection shall not take effect with respect to any payment of wages made in the calendar year in which the certificate is furnished. “(6) If, on any day during the calendar year, the withholding exemptions to which the employee is entitled is less than the withholding exemptions claimed by the employee on the withholding 70 Stat. 75 exemption certificate then in effect with respect to him, the employee shall, within ten days thereafter, furnish the employer with a new withholding exemption certificate relating to the withholding exemptions which the employee then claims, which shall in no event exceed the exemptions to which he is entitled on such day. If, on any day during the calendar year, the withholding exemptions to which the employee is entitled is greater than the withholding exemptions claimed, the employee may furnish the employer with a new withholding exemption certificate relating to the withholding exemptions which the employee then claims, which shall in no event exceed the exemptions to which he is entitled on such day. “(7) Withholding exemption certificates shall be in such form and contain such information as the Commissioners may by regulations prescribe. “(f) Failure To Withhold or Pay Amounts Withheld.—(1) Every employer, who fails to withhold or pay to the Collector any sums required by this section to be withheld and paid, shall be personally and individually liable therefor to the District of Columbia; and any sum or sums withheld in accordance with the provisions of this section shall be deemed to be, and shall be, held in trust by the employer for the District of Columbia. “(2) The District of Columbia shall have a lien upon all the property of any employer who fails to withhold or pay over to the Collector sums required to be withheld under this section. If the employer withholds but fails to pay over the amounts withheld to the Collector the lien shall accrue on the date the amounts were withheld. If the employer fails to withhold, the lien shall accrue on the date the amounts were required to be withheld. “(g) Statement To Be Furnished Employee.—(1) Every person required to deduct and withhold from an employee a tax under this section, or who would have been required to deduct and withhold a tax under this section if the employee had claimed no more than one withholding exemption, shall furnish to each such employee in respect to the wages paid by such person to such employee during the calendar year, on or before January 31 of the succeeding year, or, if his employment is terminated before the close of such calendar year, on the day on which the last payment of wages is made, a written statement showing the following: “(A) The name and address of such person; “(B) The name and address of the employee and his social security account number; “(C) The total amount of wages as defined in this article; and “(D) The total amount deducted and withheld as tax under this section. “The statement required to be furnished by this subsection in respect of any wages shall be furnished at such other times, shall contain such other information, and shall be in such form, as the Commissioners may by regulation prescribe. A duplicate of such statement if made and filed in accordance with regulations prescribed by the Commissioners shall constitute the return required to be made in respect to such wages. “(2) The Commissioners may promulgate regulations providing for reasonable extensions of time, not in excess of thirty days, to employers required to furnish statements under this subsection. “(h) Liability for Tax Withheld.—An employer shall be liable for the payment of tax required to be deducted and withheld under this section. Such tax shall be paid to the Collector and shall not be paid to any other person. 70 Stat. 76 “(i) Declarations, Requirements, Time for Filing.—(1) Every person residing or domiciled in the District at the times prescribed in paragraph (4) of this subsection shall, at such times, make a declaration of his estimated tax for the taxable year if— “(A) the gross income for the taxable year can reasonably be expected to consist of wages and of not more than $1,000 from sources other than such wages, and can reasonably be expected to exceed the total amount of the personal exemptions to which he is entitled under this article plus $5,000; or “(B) the gross income can reasonably be expected to include more than $1,000 which is not subject to the withholding provisions of this article, and can reasonably be expected to exceed the personal exemptions to which he is entitled under this article, plus $500. This requirement shall not apply to any elective officer of the Government of the United States or any employee on the staff of an elected officer in the legislative branch of the Government of the United States if such employee is a bona fide resident of the State of residence of such elected officer, or any officer of the executive branch of such Government whose appointment to the office held by him was by the President of the United States and subject to confirmation by the Senate of the United States and whose tenure of office is at the pleasure of the President of the United States, unless such officers are domiciled within the District on the last day of the taxable year. Under this article, a declaration of estimated tax shall be considered a return of income. “(2) In the declaration required under paragraph (1) of this subsection, the individual shall state— “(A) the amount which he estimates as the amount of income tax due under this article for the taxable year; “(B) the amount which he estimates as the credit for tax withheld for the taxable year under this article; “(C) the excess of the amount estimated under subparagraph (A) over the amount estimated under subparagraph (B), which excess for purposes of this section shall be considered the estimated tax for the taxable year; and “(D) such other information as may be prescribed in regulations promulgated by the Commissioners. “(3) In the case of a husband and wife, a single declaration under this section may be made by them jointly, in which case the liability with respect to the estimated tax shall be joint and several. No joint declaration may be made if the husband and wife are separated under a decree of divorce or of separate maintenance, or if they have different taxable years. If a joint declaration is made but a joint return is not made for the taxable year, the estimated tax for such year may be treated as the estimated tax of either husband or wife, or may be divided between them. “(4) The declaration required under paragraph (1) of this subsection shall be filed with the Assessor on or before April 15 of the taxable year, except that if the requirements of paragraph (1) of this subsection are first met— “(A) after April 1 and before July 2 of the taxable year, the declaration shall be filed on or before July 15 of the taxable year; “(B) after July 1 and before October 2 of the taxable year, the declaration shall be filed on or before October 15 of the taxable year; or “(C) after October 1 of the taxable year, the declaration shall be filed on or before January 15 of the succeeding taxable year: 70 Stat. 77 Provided, That the declaration required to be filed during 1956 may be filed not later than October 15, 1956, if the requirements of paragraph (1) of this subsection are fulfilled at any time prior to October 1, 1956. “(5) An individual may make amendments of a declaration filed during the taxable year under this subsection, under regulations prescribed by the Commissioners. “(6) If on or before January 15 of the succeeding taxable year the taxpayer files a return for the taxable year for which the declaration is required and pays in full the amount computed on the return as payable, then under regulations prescribed by the Commissioners— “(A) if the declaration is not required to be filed during the taxable year, but is required to be filed on or before such January 15, such return shall, for the purposes of this section, be considered as such declaration; and “(B) if the tax shown on the return, reduced by the credits under this article, is greater than the estimated tax shown in a declaration previously made or, in the last amendment thereof, such return shall, for the purposes of this section, be considered as the amendment of the declaration permitted by this subsection to be filed on or before such January 15. “(7) The Commissioners may promulgate regulations governing reasonable extensions of time for filing declarations and paying the estimated tax. Except in the case of taxpayers who are abroad, no such extensions shall be for more than six months. “(8) If the taxpayer is unable to make his own declaration, the declaration shall be made by a duly authorized agent or by the guardian or other person charged with the care of the person or property of such taxpayer. “(9) The provisions of section 4 of tile V of this article shall apply to a declaration of estimated tax. “(10) Payment of the estimated tax, or any installment thereof, shall be considered payment on account of the tax for the taxable year. “(j) Relief From One-Half of Income Tax Liability for the First Taxable Year Under Withholding.—One-half of the liability for the income tax imposed by this Act for the calendar year 1956, or the fiscal year of a taxpayer beginning during such calendar year, upon any resident of the District (other than fiduciaries) shall be discharged. The remainder of the total amount of the income tax due as shown on the taxpayer’s return shall be paid to the collector on the 15th of April, 1957, or if the return be made on the basis of a fiscal year the remainder of the total amount of such tax shall be paid on the fifteenth day of the fourth month following the close of the fiscal year. “(k) Withholding of Income Tax and Payment Over to Collector by the United States.—(1) The Secretary of the Treasury of the United States, pursuant to regulations promulgated by the President, is authorized and directed to enter into an agreement with the Commissioners, within one hundred and twenty days of the request for agreement from the Commissioners. Such agreement shall provide that the head of each department or agency of the United States shall comply with the requirements of this article in the case of employees of such agency or department who are subject to income taxes imposed by this article, and whose regular place of employment is within the District of Columbia. No such agreement shall apply with respect to compensation for service as a member of the Armed Forces of the United States, or with respect to compensation of an employee who is not a resident of the District of Columbia as defined in this article. “(2) Nothing in this subsection shall be deemed to consent to the applicability of any provision of law which has the effect of imposing 70 Stat. 78 more burdensome requirements upon the United States than it imposes upon other employers, or which has the effect of subjecting the United States or any of its officers or employees to any penalty or liability by reason of the provisions of this subsection.”