You already know that President Donald Trump signed the “Tax Cuts and Jobs Act” into law on December 22, 2017. Among other things, the new law cut corporate tax rates permanently and individual tax rates temporarily.
The Internal Revenue Service (“IRS”) issued new income tax withholding tables for the 2018 tax year. IRS Notice 1036 mandates that employers must begin using the new income tax withholding tables as soon as possible, but no later than February 15, 2018. The updated tables can be found at www.IRS.gov/Notice1036.
The new tables are designed to work with the W-4 forms employers currently have for each employee, and the IRS reports that the new tables should result in the correct amount of tax withholding. However, employers should also be aware that a new W-4 form is being developed by the IRS, but a release date has not yet been identified by the IRS.
What Does This Mean For You? Employers who process payroll in-house should review the new income tax withholding tables and begin using them in processing payroll as soon as possible, but no later than February 15, 2018. Employers who use a third-party payroll processor should confirm that the payroll processor has transitioned to using the new income tax withholding tables.
If you have any questions about this or any other employment or labor law issue, please contact Grace Nguyen Bond at 717-509-7226 or email@example.com, or Whitney Rahman at 717-509-7237 or firstname.lastname@example.org.