Why Has My Paycheck Changed?
As soon as February, your employees may notice a change in their federal withholding amount and net pay. Many employees will begin to see increases in their net pay – due to changes to the withholding tables posted by the IRS this month. The IRS made changes to the withholding tables as a result of the Tax Reform legislation enacted last month.
The IRS has encouraged employers to use the new withholding tables as soon as possible but no later than February 15, 2018 at the latest.
What Do Employers Need To Do?
If you use a payroll service, the payroll service will update withholding schedules. If you process payroll in-house, your withholding tables need to be updated. Go to IRS.gov for updated information.
What Do Employees Need To Do?
The IRS does not have the 2018 W-4 available yet. If an employee would like to change their Federal withholdings, they can wait until the new form is released or they can complete a 2017 W-4 form.
By the end of February, the IRS plans to have a calculator available to employees. This will help people determine if they need to complete a new W-4 for withholding. The calculator will be available at IRS.gov.
More information is available in the Withholding Tables Frequently Asked Questions (https://www.irs.gov/newsroom/irs-withholding-tables-frequently-asked-questions).
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