IRS Temporarily Revises W-4 Rules

2018 Form W-4 not available yet. The IRS is currently working on revising Form W-4 to reflect the changes made by The Tax Cuts and Jobs Act (the Act).  These changes include; changes in available itemized deductions, increases in the child tax credit, the new dependent credit, and the repeal of dependent exemptions. This will result in the 2018 Form W-4 released after Feb. 15, 2018.

The IRS has issued a notice that the effective period to claim exemption from income tax withholding for 2018 using Form W-4 (Employee’s Withholding Allowance Certificate) is extended from February 15 to February 28, and permits employees to claim exemption from withholding for 2018 by temporarily using 2017 Form W-4. The IRS temporarily suspends the requirement that employees must furnish their employers new W-4 forms within 10 days of changes in status that reduce the withholding allowances they are entitled to claim. Additionaly, The Act provides that the optional withholding rate on supplemental wage payments is 22% from 2018 through 2025; and provides that, for 2018, withholding on periodic pension and annuity payments when no withholding certificate is in effect is based on treating the payee as a married individual claiming three withholding allowances. For additional information or questions, please contact us, 517.323.7500.

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