The IRS released new tax withholding tables Jan. 11 to reflect changes made by the GOP’s new tax law, meaning that employees will begin to see changes on their paychecks as soon as February.
“The new law makes a number of changes for 2018 that affect individual taxpayers. The new tables reflect the increase in the standard deduction, repeal of personal exemptions and changes in tax rates and brackets,” an IRS press release said.
“Many employees will begin to see increases in their paychecks to reflect the new law in February. The time it will take for employees to see the changes in their paychecks will vary depending on how quickly the new tables are implemented by their employers and how often they are paid — generally weekly, biweekly or monthly.”
The tables are designed to be used by payroll departments with the traditional W-4 forms employees fill out when employed. The IRS will also be launching a revised withholding calculator on its website, scheduled for release late February.
“The IRS is also working on revising the Form W-4. Form W-4 and the revised calculator will reflect additional changes in the new law, such as changes in available itemized deductions, increases in the child tax credit, the new dependent credit and repeal of dependent exemptions,” the press release said.
“The calculator and new Form W-4 can be used by employees who wish to update their withholding in response to the new law or changes in their personal circumstances in 2018, and by workers starting a new job. Until a new Form W-4 is issued, employees and employers should continue to use the 2017 Form W-4.
The IRS Office of the Taxpayer Advocate also released its annual report to Congress today, which argued that the agency lacked the resources to adequately deal with changes brought about by the new tax law.
“The IRS appreciates the help from the payroll community working with us on these important changes,” said Acting IRS Commissioner David Kautter.
“Payroll withholding can be complicated, and the needs of taxpayers vary based on their personal financial situation. In the weeks ahead, the IRS will be providing more information to help people understand and review these changes.”