IRS Regulations

The Tax Cuts and Jobs Act was signed into law on December 22, 2017 and officially went into effect on January 1, 2018. Accordingly, the IRS has issued new payroll withholding tables through Notice 1036 as well as IRS Withholding Tables Frequently Asked Questions. The new tables reflect the increase in the standard deduction, the repeal of personal exemptions, and new tax rates and brackets, and are designed to produce the correct amount of tax withholding and are also intended to avoid over- and under-withholding of tax. The new tables must be implemented no later than February 15, 2018. The IRS also plans on issuing a new Form W-4 in the near future. Though employees will not be required to complete a new W-4 form (if one is already on file), they may elect to do so as a result of the changes in the payroll withholdings.

Your payroll service provider (for entities that out-source the payroll function) or your accounting software consultant (for those entities that perform the payroll function in house) should be working with you to ensure you are in compliance with the new withholding tables.