GOP/TAXES: “Republicans’ tax overhaul will completely change the way employers figure out how to withhold income taxes from millions of Americans’ paychecks, potentially disrupting payroll departments as they figure out how to switch to the new system with little guidance and just days to spare.
As of Jan. 1, the Republican plan dumps the entire concept of personal exemptions that workers now use to calculate how much should be taken from their pay on the tax forms known as W-4s. That means forms could need to be rewritten, and millions of workers will need to submit new ones. At the same time, the GOP plan doesn’t specify exactly what should happen, leaving it to the IRS to figure out.
The vagueness about withholding is one of the casualties of Republicans’ rush to push their plan through Congress and into law so its combination of individual and business tax cuts can boost the economy ahead of next year’s midterm elections. That lack of detail may mean workers may not see changes in their paychecks as quickly as some lawmakers are suggesting…
Employers are especially confused because the bill says Treasury and the Internal Revenue Service could decide not to change the payroll withholding system until 2019, a move that could mean some workers have a lot less than they actually owe withheld from their checks under the new law. Some could end up facing tax penalties…
In the meantime, payroll administrators have a lot of unanswered questions.”
-Brian Faler, “New paycheck rules for millions leave employers scrambling,” Politico, Dec. 20, 2017 05:54pm