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IRS Releases Updated 2018 Withholding Tables, Extends use of the Existing 2017 Form W-4

2018 Withholding Tables

The Internal Revenue Service released Notice 1036, which updates the income-tax withholding tables for 2018 reflecting changes made by the tax reform legislation enacted last month. This is the first in a series of steps that IRS will take to help improve the accuracy of withholding following major changes made by the new tax law.

The updated withholding information shows the new rates for employers to use during 2018. Employers should begin using the 2018 withholding tables as soon as possible, but not later than Feb. 15, 2018. They should continue to use the 2017 withholding tables until implementing the 2018 withholding tables.

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.

Form W-4

The IRS issued Notice 2018-14 to provide more guidance on the withholding rules that were changed by the Tax Cuts and Jobs Act. The notice (1) extends the use of the existing 2017 Form W-4, Employee’s Withholding Allowance Certificate, to claim exemption from withholding for 2018 until the IRS can issue a new 2018 Form W-4; (2) temporarily suspends the Sec. 3402(f)(2)(B) rule that employees must notify their employers of changes in status that affect their withholding within 10 days; (3) provides the new rate of optional withholding on supplemental wages; and (4) provides that withholding on periodic payments (such as for annuities) under Sec. 3405(a)(4) when no withholding certificate is in effect is based on treating the payee as married and claiming three withholding allowances.

For more information, click the links below:

Updated 2018 Withholding Tables Now Available

2018 Income Tax Withholding Tables

About Form W4

IRS issues more guidance on withholding rules for new tax law – Form W-4

 

If you have any questions or if you would like more information, contact Fred Schutz at (856) 722-5300 ext. 201 or Dave Gill at ext. 210.