On January 9, 2018, the Internal Revenue Service (IRS) issued new income tax withholding tables. These tables (Notice 1036) will help employers determine how much income tax to withhold from their employees’ paychecks. The new tables reflect the changes made by the tax reform laws enacted in December 2017.
Employers must start using these new tables by February 15, 2018. The new tables work with the existing Form W-4, so employers don’t need to go back and obtain updated forms from their employees. Form W-4 will be revised in 2019 to more fully reflect the new law and help individuals determine whether to adjust their withholding. Until the revised form is released, employers and employees should continue to use the 2017 Form W-4.
Employers should familiarize themselves with the new tables and start using them by February 15, 2018. The IRS has said that more detailed tax-withholding guidance will be available in early 2018.
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