Taxable income computed by date earned or pay date?
Is taxable income for a given year computed by the days where the income was actually earned or the pay period in which the pay is issued?
For example, suppose the pay period for an employee spans across years (e.g. Dec 28, 2015 - Jan 8, 2016). How would the taxable income be computed?
Is it allocated roughly 40% to 2015 and 60% to 2016 or is it allocated entirely to 2016 when the pay is actually issued?
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The pay date determines the tax year. That is the date they give you the check, or the date it is direct deposited.
Knowing how many pay checks you will get this year will be important when determining how much from each paycheck to have withheld for a 401k, an FSA, or an HSA.
as was pointed out by dave_thompson_085 in the comments:
Publication 17 (2014), Your Federal Income Tax
Constructive receipt. Generally, you constructively receive income when it is credited to your account or set apart in any way
that makes it available to you. You do not need to have physical
possession of it. For example, interest credited to your bank account
on December 31, 2014, is taxable income to you in 2014 if you could
have withdrawn it in 2014 (even if the amount is not entered in your
records or withdrawn until 2015).
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