Question

Looking at her paycheck, Rhonda notices that $30.56 was withheld from her last paycheck for state income stax while $122.25 was withheld for federal income tax. She knows that she indicated on her employment paperwork to set her state withholding at 21% of the federal withholding. What should Rhonda be thinking?

Answer 1

C: The state withholding is too high, too much is being withheld.

Explanation:

Answer 2

Rhonda should be thinking that the state income tax deduction was in excess by $4.89

Explanation:

The state income tax withholding should have been 21% of the her federal income tax withholding of $122.25

The expected state income tax withholding=21%*$122.25=$25.67

The actual amount deducted for state income tax is $30.56 which translated into excess deduction of $4.89.

The actual deduction was 25% of federal income tax ($30.56/$122.25)