Although President Trump has signed the new tax bill this morning, there are no immediate changes that need to be made to employee-related payroll taxes. While the tax bill will take effect January 1, 2018, changes on employee withholdings will take some time to understand and implement. At this time, employers and payroll administrators are waiting on the IRS to provide more information and guidance on the matter. Early in December, the IRS stated that new tax withholding tables for employees and payroll administrators would be out sometime in January. The agency stated, “The IRS has started initial work on implementing this major tax legislation. We are working to provide more specific information and guidance to taxpayers, businesses and the tax community as quickly as possible in the weeks and months ahead.”
As of now, the IRS has not provided a clear deadline on when these new withholdings tables will be available. Consequently, changes in employee withholdings will likely not take place until February, as it will take time for employers and payroll administrators to begin implementing the changes. Changes in the W-4 form will likely occur as well, and administrators might therefore need to obtain updated and signed forms from employees. PAYDAY will continue to monitor these changes and continue providing guidance to our clients. If you are a PAYDAY client, contact your dedicated Account Manager if you have additional questions.