On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “Tax Reform Law”), which made significant changes to the Internal Revenue Code. Below, we’ll simplify some of the newest changes and how these may impact your pay. Since every situation is different, we’d also advise you to get more information from your IRS tax professional.
The Tax Reform Law updates the federal income tax withholding tables for 2018 and includes 1) an increase in the standard deduction, 2) repeal of personal exemptions, and 3) changes in tax rates and brackets.
ADP will begin using these new tax tables beginning with pay dates of January 20, 2018, and after. Once we’ve made this change, you may notice a difference in your paycheck deductions.
The IRS is also making changes to its Form W-4 and tax withholding calculator, (which should be available by the end of February)— but in the meantime, you should continue to use the 2017 Form W-4 to claim withholding allowances. Once the revamped calculator is released, we’d encourage you to use it as a resource to make any desired adjustments to your withholding.