The Victory Tax is a tax of 5% on every individual who has an annual income of more than $624 ($12 per week). It is in addition to the regular Income and Social Security taxes. The Victory tax starts January 1, 1943, and ceases at the end of the war.

Beginning January 1, 1943, it is required by law to withhold from your wages or salary each pay day an amount equal to 5% of everything you earn in excess of $12 per week. There is no distinction between married and single persons in the assessment of the Victory tax.

Amount to be withheld by employer is 5% of the wages over:

    Pay-roll period    Exemption
        Weekly           $12
        Biweekly          24
        Semimonthly       26
        Monthly           52

The law permits your employer to withhold from your wages a tax determined in accordance with tables which are reproduced in this folder. The amount of tax so withheld will not always be correct to the penny.

Example: If you earn $33 per week, your Victory tax deduction will be $1.10 each week, whereas actually 5% of $21 (the amount in excess of $12) is $1.05.

This discrepancy is not important because any overpayment will be refunded to you or credited against your income tax at the time you file your Victory tax return.

In cases where the deduction will be slightly less than an actual 5%, you will have a small amount to pay when you file your return.

Before January 31^st of 1944 and each year thereafter, your employer must furnish you with a receipt showing the total amount of wages paid to you and the total tax withheld during the year.

The New VICTORY TAX (page 2 of )

If you quit your job before the end of the year he must give you a similar receipt within thirty days after he pays your final wages.

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[The New VICTORY TAX Brochure Transcription -- continued]

It is important that you keep these receipts as you will need them when you file your Victory tax returns.

Part of your Victory tax will be refunded to you after the war, or credited against any Income tax then due. The refund is limited to 25% of the tax paid in the case of a single person (maximum $500), 40% for a married person (maximum $1,000), and 2% for each dependent (maximum $100.)

The amount of Victory tax which will be refunded to you can be figured out according to the following rules:

1. A single person will receive $500, or 25% of the annual Victory tax paid, whichever is less.
2. The head of a family will receive $1,000, or 40% of the annual Victory tax paid, whichever is less.
3. A married person living with husband or wife: where
   1. Separate returns are filed by each will receive $500, or 40% of the tax paid, whichever is less.
   2. Separate return is filed by one spouse, and none by the other, or a joint return is filed, $1,000, or 40% of the tax, whichever is less.
4. For each dependent, you will receive $100, or 2% of the tax paid, whichever is less.

Example: Suppose a married man with two children (whose wife does not file a tax return) pays for a given year a total of $150 in Victory taxes. Item 3 (b) above shows that he will get a refund of either $1,000 or 40% of the $150 tax he has paid, whichever is less. Since 40% of $150 amounts to $60, and is less than $1,000, he would receive a refund of $60.

In addition (see item 4) he would receive a refund for each of his two children, which in this case would be 4% of $150, or an additional $6. Thus, his total post-war Victory tax refund for the year would be $66.

If, in the above illustration, the taxpayer were single and had no dependents, he would receive a refund of $37.50, or 25% of the $150 tax paid. The percentage is used because it produces a smaller amount than the flat $500 refund.

However, if this single man’s Victory tax had amounted to as much as $2,500, he would receive a refund of $500, for that amount would be less than 25% of his $2,500 tax ($625).

When Victory tax returns are filed each year, credits can be taken for amounts paid for certain insurance premiums, amounts used to pay certain debts, and amounts used to buy Government Bonds. The credits taken for these items cannot exceed the amount of the post-war refund, and the post-war refund will be reduced by any credits taken for these items.

These refunds will be made by the Government when the War is over.

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