(8-10 minute read)
On June 6, 2018, the Internal Revenue Service (IRS) released a draft version of the updated W-4 form to be used in 2019. This form is the document that all employees, old and new, will be completing next year to guide their tax withholding. The revisions are driven by the 2018 Tax Cuts and Jobs Act (TCJA). In early January of this year we provided an overview of the changes, and later that month the tax tables for the 2018 were made available and were applied to all clients’ payroll. Publishing this draft now provides the Human Resources and Payroll leaders and systems time to prepare for the significant changes on the horizon.
It is important to remember that the published form is a draft and will be subject to changes and influence from various concerned parties, including payroll companies, business advocates, labor unions and politicians. Completing new tax documents will not be legally required, however the new form has enough changes that most employees will benefit from completing a new form for the 2019 year. Our payroll system is being modified to comply with the new form and will support the 2018 form as well as the new 2019 form when the final version is released.
It appears that the IRS’ direction is to update the W-4 to be a more complete view of individual income by incorporating income and deductions from income sources outside of the employer-employee relationship. Here are the highlights:
The form recently released by the IRS is a draft and we recommend against providing copies of the form to employees at this time. We recommend that employees who are concerned about the impact of TCJA consult the IRS W-4 calculator that was released earlier this year. The calculator is located HERE. This self-guided tool enables employees to review their income and tax settings to date, and identify any mid-year adjustments they want to make.
Axios HR is committed to monitoring upcoming changes and ensuring that our technology is ready. Stay tuned to our Blog for updates as they are available, and please reach out with any questions.
June 8, 2018
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