2018 Federal Tax Withholding Tables Released

On January 11, the IRS released Notice 1036, Early Release Copies of the 2018 Percentage Method Tables for Income Tax Withholding. The IRS also issued news release IR-2018-05 and posted Frequently Asked Questions, which provide additional information on withholding changes for 2018 and 2019. The tables included in Notice 1036, along with the 2018 wage-bracket withholding tables, will appear in IRS Publication 15, (Circular E), Employer’s Tax Guide, which will be published at a later date.

The withholding tables were released later than usual because Public Law 115-97, unofficially known as the Tax Cuts and Jobs Act (TCJA) was not enacted until December 22, 2017. The new withholding tables are designed to work with the Forms W-4 that employees have already filed with their employers to claim withholding allowances. This is intended to minimize the burden on employees and employers. Employees do not have to do anything at this time.

Form W-4 to be revised

The IRS is also working to revise Form W-4, Employee’s Withholding Allowance Certificate. The revised calculator and new Form W-4 can be used by employees to update their withholding in response to the TCJA or changes in their personal circumstances in 2018, and by employees 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 new W-4 will be posted to our website as soon as it is released.

-Source:  American Payroll Association