The Federal Tax Withholding Tables for 2018 have been released by the IRS. Employers are required to implement the 2018 withholding tables as soon as possible, but no later than February 15, 2018.
The Kettering Health Network Payroll system is being updated to ensure the new tax tables are available by the February 15 de3adline.
The new withholding tables are designed to work with Form W-4 that employees have already filed to claim withholding allowances. This is intended to minimize the burden on both employees and employers. Employees do not have to do anything at this time.
Form W-4 to Be Revised
The IRS is also working to revise Form W-4, Employee’s Withholding Allowance Certificate. Once released, the new Form W-4 and revised calculator can be used to update employee withholdings. Until a new Form W-4 is issued, employees should continue to use the 2017 Form W-4.
Rates for Withholding on Supplemental Wages for 2018
Supplemental wages (such as bonuses) are taxed at a flat rate. The new rate will be 22% for supplemental wages up to and including $1 million, and 37% for supplemental wages over $1 million.
For additional information about the recently passed tax reform legislation, please reference the New 2018 Tax Withholding Tables section found on the Payroll intranet page.