Code of Federal Regulations Title 41. Public Contracts and Property Management § 41.302–17.103 What are the advantages of choosing a 1–year or a 2–year RITA process?

(a) The one-year process is simpler. It reimburses the employee more quickly, and it eases the administrative burden required to calculate the RITA. Most importantly, the one-year process eliminates the possibility of charging employees for excess payments to the IRS, the so-called “negative RITA.”

(b) The two-year process provides a somewhat more accurate calculation of the additional taxes the employee incurs because it is based on the employee's actual Year One taxable income and filing status rather than the taxable income and filing status from the year before.