The amount of federal income tax withheld is based on withholding tables published by the Internal Revenue Service (IRS) and the information provided on each employee's Form W-4, Employee's Withholding Allowance Certificate.
The IRS revised its withholding tables for 2018 to reflect the Tax Cuts and Jobs Act of 2017 (Pub. L. 115-97). Employers must begin using the revised tables no later than February 15, 2018. The tables are designed to work with existing Forms W-4.
Each new employee should fill out a W-4 when hired. If a new employee does not provide a completed W-4, tax is withheld as if he or she is single, with no withholding allowances. A W-4 remains in effect until the employee provides a new one. Revised withholding must begin no later than the first payroll period ending on or after the 30th day after the date the revised W-4 was received. Employers may establish systems that let employees change their W-4 information electronically.
Employers are no longer required to routinely submit an employee's Form W-4 to the IRS when an employee claims more than 10 withholding allowances or claims an exemption from withholding when he or she normally earn wages of more than $200 per week. However, in certain circumstances, the IRS may direct an employer to submit copies of Forms W-4 for certain employees in order to ensure that the employees have adequate withholding. Employers are now required to submit the Forms W-4 to the IRS only if directed to do so in a written notice or pursuant to specified criteria to be set forth in future published guidance.
If the IRS determines that an employee does not have enough withholding, it ...