{"data":{"id":"us/41-cfr-302-17.41","jurisdiction":"us","citation":"41 CFR 302-17.41","heading":"-17.41 Applicable State marginal tax rate and effect on the RITA and an employee's State tax return(s).","body":"If two or more States that are involved in an employee's relocation impose an income tax on relocation benefits, then the employee's relocation benefits may be taxed by both States. Most commonly, the old and new duty stations are in the two States involved. The following table lays out the possibilities:\nTable 1 to § 302-17.41\nIf: But: The agency will use the following as the State marginal tax rate in the CMTR: The RITA will include an appropriate allowance for: Employee's action:\nOnly one involved State has a State income tax The marginal tax rate of the one State that taxes income Taxes incurred in that State Pay the taxes required by the State that taxes income.\nEach involved State taxes a different set of the relocation benefits, with no overlap The average of the marginal tax rates for each State involved Taxes incurred in all involved States File tax returns in each involved State, and pay the applicable taxes.\nTwo or more involved States tax some of the same relocation benefits All involved States allow an adjustment or provide a credit for income taxes paid to other States The marginal tax rate of the State that has the highest State income tax rate Taxes incurred in all involved States File tax returns in each involved State, take the appropriate credits and/or adjustments, and pay the applicable taxes.\nTwo or more involved States tax some of the same relocation benefits One or more involved States does not allow an adjustment or provides a credit for income taxes paid to other States The sum of all applicable State marginal tax rates Taxes incurred in all involved States File tax returns in each involved State, and pay the applicable taxes. This may result in paying taxes in more than one State on the same relocation benefits.","path":["Title 41—Public Contracts and Property Management","Subtitle F—Federal Travel Regulation System","CHAPTER 302—RELOCATION ALLOWANCES","SUBCHAPTER F—MISCELLANEOUS ALLOWANCES","PART 302-17—TAXES ON RELOCATION EXPENSES","Subpart D—The Combined Marginal Tax Rate (CMTR)"],"source_url":"https://www.ecfr.gov/api/versioner/v1/full/2026-08-25/title-41.xml","current_through":"2026-08-25","vintage":"","retrieved_at":"2026-08-27T02:26:05Z","sha256":"6cb34fa91a1fc363e31235cca65edab3f37d044fff4e23e2573382aafb696619","source_id":"us-cfr","stale":true,"prev":"us/41-cfr-302-17.40","next":"us/41-cfr-302-17.42"},"notice":"GroundRules: Original legal text. Not legal advice."}