New Guidance Issued on Withholding Rules

By NSA Admin posted 01-29-2018 01:50 PM

The Internal Revenue Service (IRS) today issued Notice 2018-14, which provides additional guidance to employers on withholding changes in response to the enactment of the "Tax Cuts and Jobs Act" (P.L. 115-97).

As described by the IRS, Notice 2018-14:

  1. extends the effective period of Forms W-4 furnished to claim exemption from income tax withholding under § 3402(n) for 2017 until February 28, 2018 and temporarily permits employees to claim exemption from withholding under § 3402(n) for 2018 by using 2017 Form W-4;

  2. suspends the requirement that employees must furnish their employers new Forms W-4 within 10 days of changes of status resulting in fewer withholding allowances;

  3. provides that the optional withholding rate on supplemental wage payments is 22% for taxable years 2018 through 2025; and

  4. provides that, for 2018, withholding on annuities or similar periodic payments where no withholding certificate is in effect is based on treating the payee as a married individual claiming three withholding allowances under § 3405(a)(4).


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