Tuesday, December 26, 2017

Federal Tax Reform Has Been Enacted: What it Means for You

The information below applies to ALL employers and employees, however, this post is written specifically with our payroll clients in mind.

H.R. 1, the Tax Cuts and Jobs Act (the Act) was enacted on December 22, 2017 and generally goes into effect on January 1, 2018. The Act includes several significant changes that will impact your payroll, employment tax and employee benefits.

These are two important changes that will impact employers and employees:

•   Income Tax Withholding Tables: Although new federal income tax tables and rates will take effect on January 1, there may be a delay in release of withholding tax guidance from the U.S. Treasury Department. We will continue using the 2017 tables to determine how much income tax to withhold from your employees until the revised 2018 tables are issued. We will update any new income tax withholding tables in your payroll platform and reach out to you if any action is needed on your part.

•   Federal Forms W-4: Some employees may ask questions about the effect of the Act or may submit updated Forms W-4 to modify their withholding allowances for 2018. You should be prepared to accept updated Forms W-4 from employees, but may wish to advise employees that a revised Form W-4 will likely be issued by the IRS later in 2018, and that the employee may need to complete the revised form at that time.

No comments: