By Kathryn Aldape, Paylocity
At the close of February, the IRS released an updated tax withholding calculator on IRS.gov and issued a new Form W-4, Employee’s Withholding Allowance Certificate. You can use the online calculator to check your 2018 tax withholding following passage of the Tax Cuts and Jobs Act in December, and then use that information to help you decide if you wish to choose to adjust your withholding/filing status/exemptions.
Below is an illustration of the changes between the 2017 and updated 2018 version.
The major changes to the worksheet reflect required updates to income thresholds for the Child Tax Credit as well as additional steps to determine how to adjust dependent exemptions based on projected annual income.
The IRS plans to release a new version of Form W-4 for 2019 that will contain further changes involving withholding.
If individuals have questions about the tax updates for 2018, we would advise them to reach out to a tax attorney regarding interpretation of the law.
Kathryn Aldape, Paylocity