New income-tax withholding tables reflecting the changes under the federal tax reform law were released by the Internal Revenue Service yesterday.
Notice 1036 updates the tables for 2018 and is the first in a series of steps to help improve the accuracy of withholding following major changes made in tax law.
The IRS says employers should begin using the 2018 withholding tables as soon as possible, but not later than Feb. 15. They should continue to use the 2017 withholding tables until implementing the 2018 withholding tables.
“The IRS appreciates the help from the payroll community working with us on these important changes,” said -acting IRS Commissioner David Kautter. “Payroll withholding can be complicated, and the needs of taxpayers vary based on their personal financial situation. In the weeks ahead, the IRS will be providing more information to help people understand and review these changes.”
The new tables reflect the increase in the standard deduction, repeal of personal exemptions and changes in tax rates and brackets.
Many employees will begin to see increases in their paychecks to reflect the new law in February, the agency said. The time it will take for employees to see the changes in their paychecks will vary depending on how quickly the new tables are implemented by their employers and how often they are paid.