The IRS released updated withholding tables for 2018. Employers should begin using these tables on 2018 payrolls as soon as possible, but no later than 2/15/18. Tables can be found here: https://www.irs.gov/pub/irs-pdf/n1036.pdf.
The tables reflect changes made by the Tax Cuts and Jobs Act, including:
- Increase in the standard deduction
- Elimination of personal exemptions
- Modifications to tax rates and brackets
Do employees need to do anything?
Employees are not required to do anything at this time. Employers should refigure their employee withholdings based on the W-4 they have on file. However, the IRS is in the process of updating the withholding tax calculator on IRS.gov, which should be released by the end of February. Once released, employees are encouraged to use this calculator to further adjust their withholding.
The IRS is also in the process of making updates to the Form W-4, which will reflect changes resulting from the Tax Cuts and Jobs Act. They are encouraging employees to file new Forms W-4 for 2019, once the form has been revised.
If you need help with the new tables or how to withhold for your employees, give us a call. We’ll make sure you start the new year off right.