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New Federal Form W-4 Published

​ ​​  ​2018 W-4, Form W4, Tax Withholding, Payroll

On February 28, 2018, the Internal Revenue Service (IRS) released the new 2018 Form W-4 (Employee Withholding Allowance Certificate). Employers use this form to withhold the correct amount of federal income tax from an employee’s paycheck and employers should make sure to have their employees complete this form:

  1. At time of hire; and

  2. At any time if there are any significant changes in the employee’s life (such as getting married or divorced or had children) that may affect their tax liability.

Accurate withholding is meant to get employees close to their true tax liability at the end of the year so there are hopefully few surprises when they file their annual tax returns on April 15th. The new Tax Cuts and Jobs Act, that was passed into law in December 2017, made significant changes in calculating an individual’s income tax liability and changed the methodology for calculating personal allowances on Form W-4.

At this time, the IRS is not requiring employers to have their employees complete new Form W-4s, but it’s probably a best practice to make your employees aware of the changes in tax code. They may want to review their current withholdings on their Form W-4. The IRS has released a Withholding Calculator to assist employees in determining their new tax liabilities under the new regulations.

It’s important to note that employers should be diligent and ensure that they are also giving their employees their respective State income tax withholding allowance certificates as State income tax and withholding allowance requirements may differ. The Federal Form W-4 should not be used as a default for State tax withholding forms.

If you have any questions about the new Federal Form W-4, updated payroll tax withholding tables for processing payroll or creating employee communication collateral, please contact us at info@mirkinsolutions for a free consultation today.

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