IRS proposes update to income tax withholding rules
The Internal Revenue Service and the Treasury have proposed regulations updating the income tax withholding rules to reflect the changes in the Tax Cuts and Jobs Act, the recently redesigned Form W-4 and the IRS’s new Tax Withholding Estimator.
The proposed regulations aim to take into account the redesigned Form W-4, Employee’s Withholding Certificate, and the accompanying tables and computational procedures in Publication 15-T, Federal Income Tax Withholding Methods. The proposed rules and related guidance don’t require employees to furnish a new Form W-4 just because of the redesign of the Form W-4. Employees who have a Form W-4 on file with their employer from before 2020 generally will continue to have their withholding determined based on that form.
The proposed regulations allow employees to use the new IRS Tax Withholding Estimator to help them fill out the new Form W-4. Taxpayers can still use the worksheets in the instructions to Form W-4 and in Publication 505, Tax Withholding and Estimated Tax, help them complete the form the right way.
Story courtesy of Accounting Today
by Michael Cohn
February 11, 2020