IRS releases new withholding tables

Hannah Rogers
January 12, 2018

It's important to note that 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 employees are paid generally weekly, biweekly or monthly.

There are 131 filing systems that will be affected by the new law, the report said.

"We estimate that 90 percent of wage earners will experience an increase in their take-home pay", Treasury Secretary Steven MnuchinSteven Terner MnuchinMark Mellman: History's judgment Trump's motorcade greeted with chants of "lock him up" in NYC Treasury watchdog probes lack of tax plan analysis from Mnuchin MORE said in a news release. With these new guidelines, companies can start adjusting employee paychecks.

Taxpayers won't file their 2018 returns until next year, following normal procedure.

The tax law is projected to add between $1 trillion to $1.5 trillion to the debt over 10 years because of a fall in revenue, something Democrats have decried but Republicans have said will help spur economic growth.

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Americans will not be asked to input personal information into this online calculator, such as their names or Social Security Numbers, but they will need to input their income levels, family status, and a number of other details. Ron Wyden, the top Democrat on the Senate Finance Committee, said in a statement. "I look forward to GAO's independent review of these tables, which will expose whether the Trump administration is tampering with Americans' paychecks, resulting in a whopping tax bill next year". President Donald Trump and the Republican architects of the tax plan have deflected criticism of the unpopular legislation, insisting at every turn that Americans will come to love the new law when they see their heftier paychecks next month - with less money withheld in anticipation of lower income taxes.

Most workers won't have to submit any tax forms to see a change in their withholding. California, New York and New Jersey are among the states that have been considering changes to their tax codes to blunt the pain that their residents could feel from the scaling back of the state and local tax deduction in the new law.

Employers must now rush to incorporate the new tax withholding tables into their payroll systems, a process that is expected to take several weeks. We anticipate issuing the initial withholding guidance in January, and employers and payroll service providers will be encouraged to implement the changes in February.

These tax changes are all scheduled to expire after 2025, though Republicans have said they want to make them permanent.

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