On the last day of February, the Internal Revenue Service (IRS) released an updated tax withholding calculator on IRS.gov and issued a new Form W-4, Employee’s Withholding Allowance Certificate. Employers should update their hiring packages to include the new 2018 W4 form and can notify employees about the ability to use the IRS online calculator to check their 2018 tax withholding following passage of the Tax Cuts and Jobs Act in December. We suggest that all employers annually provide current employees with an opportunity to adjust their federal withholding. Employees can revise their withholding by submitting a completed 2018 Form W-4 to their employer. The tax withholding tables were already updated in IRS Notice 1036.
Additionally, the IRS released Publication 15 (Circular E), Employer’s Tax Guide, for use in 2018. The publication provides employers’ federal tax responsibilities, including the tax tables to figure taxes to withhold from each employee. The social security and Medicare tax rates are unchanged for 2018.
The withholding changes do not affect 2017 tax returns due this April.