Should I use the DCAAccount or the Tax Credit?

Using the Federal Tax Credit -- Estimated Tax Savings
 Example 1 Example 2
1.
 		     2 1
 
 		 $ 1. $ 4,000 1. $ 6,000
 
    Married/Joint
Married/Separate		 Head of Household Head of
Household		 Married filing
Jointly
1a. $
 		 $ 4000 $ 2400
2.
 		 $ 2.  $ 28,300 2.  $ 45,000
2a.
 		 % 2a.  20% 2a.  20%
2b.
 		 % 2b.  20% 2b.  4%
2c.
 		 % 2c.  40% 2c.  24%
3.
 		 $ 3.  $ 1,600 3.  $ 576
Using the DCAAccount - Estimated Tax Savings
 Example 1 Example 2
4.
 		 $ 4.  $ 4,000 4.  $ 5,000
5. Determine your combined tax savings:
 		      

 		 % 5a.  15% 5a.  28%

 		 % 5b.  5.9% 5b.  6.85%

 		 % 5c.  7.65% 5c.  7.65%
6.
 		 % 6.  28.55% 6.  42.5%
7.
 		 $ 7.  $ 1,142 7.  $ 2,125

Compare Line 3 to Line 7. If Line 7 is larger, it is most likely that the DCAAccount will be more beneficial than the Federal and State Tax Credits.

EXAMPLE 1: Single parent head of household with 2 dependents; AGI of $28,300; $4,000 expenses.
EXAMPLE 2: Married filing jointly with one dependent; AGI of $45,000; $6,000 expenses.

NOTE: Employees who live or work in New York City also save New York City Income Taxes. The NYC resident income taxes are computed on the biweekly gross with a minimum of 2.20% and maximum of 4.68% if the employee has a biweekly gross of $2,308 or higher.

The non-resident NYC Income Tax involves several calculations, but the total tax liability is less than 1%.

New York State employees who are out-of-state residents need to comply with their individual state income tax laws.

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