Withholding laws & HR compliance analysis

Withholding: What you need to know

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 Form W-4 in 2018 to reflect the Tax Cuts and Jobs Act of 2017 (TCJA) (Pub. L. 115-97). Employees whose claimed number of withholding allowances was reduced by the TCJA were required to give their employer a new Form W-4 by May 10, 2019. The IRS has developed a withholding calculator to help employees determine how many allowances to claim.
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.
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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 ...

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