Common use of Tax Liability Payments Clause in Contracts

Tax Liability Payments. Tax pay- ments equal to 39 percent of the total loan repayment amount will be cred- ited directly to the participant’s IRS (Federal tax) account simultaneously with each loan payment. The Secretary may make payments of an amount not to exceed 39 percent of the actual an- nual loan repayments made in a cal- endar year for all or part of the in- creased Federal, State, and local tax li- ability resulting from loan repayments received under the VMLRP. However, the Secretary may increase the cap, if appropriate. Supplementary payments for increased tax liability may be made for the actual amount of tax liability associated with the receipt of loan re- payments under the VMLRP. Avail- ability of these additional tax liability payments (i.e., in excess of 39 percent or other approved cap) will be identi- fied in the RFA and in the participant service agreement. Program partici- pants wishing to receive tax liability payments will be required to submit their requests for such payments in a manner prescribed by the Secretary and must provide the Secretary with any documentation the Secretary de- termines is necessary to establish a program participant’s increased tax li- ability. Tax liability payments in ex- cess of 39 percent or other approved cap will be made on a reimbursement basis only.