Normally, federal tax changes catch folks by surprise on their first January paycheck and send them running to the payroll office to fill out a new Form W4 to either increase or decrease their withholding. However, with the IRS still working to develop withholding guidance to implement the newly passed Tax Cuts and Jobs Act, those federal tax changes will be delayed in 2018.
When Will Employees See A Change?
February is the target date for federal tax table change announcements, and until then, employers are to continue to use the 2017 federal withholding tables and Forms W4.
Of course, employees who got married, had a child, or had a significant change in pay may still want to complete a new Form W4, but it will still be the 2017 version.
It has been announced that the IRS will delay changing Form W4 until 2019 (continue to use Form W-4 for 2017 for 2018) – they will make the federal tax withholding tables for 2018 work with the current (2017) Form W4.
For now, update your FICA wage limit and keep up with any state and local tax changes, but keep an ear to the ground and check back to the Optimum Solutions blog for the federal tax withholding changes!