41 CFR 302-17.61: -17.61 When WTA is optional under the two-year process.

If an agency makes the WTA optional, an employee may choose to not receive the WTA. When deciding whether or not to receive the WTA, employees should consider the following:

(a) Whether their marginal Federal tax rate will be equal to or higher than the supplemental wage rate for the calendar year in which the employee received the majority of their relocation reimbursements. If this is expected, the employee may want to elect to receive the WTA.

(b) Whether their marginal Federal tax rate will be less than the supplemental wage rate for the calendar year in which the employee received the majority of their relocation reimbursements. If this is expected, the employee may want to decline receiving the WTA to avoid or limit possible overpayment of the WTA, the so-called “negative RITA” situation. In a “negative RITA” situation, employees must repay some of the WTA in Year 2. However, even if an employee's marginal Federal tax rate will be less than the supplemental wage rate, the employee may want to accept the WTA so that their initial reimbursement is larger.