IRS Releases 2018 Withholding Tables

In accordance with the Tax Cuts and Jobs Act, the first major reform of the U.S. tax code since 1986, the Internal Revenue Service (IRS) has released updated 2018 federal income tax withholding rates (see Notice 1036). Employers should begin using the 2018 withholding tables as soon as possible, and not later than February 15, 2018.

The new withholding tables are designed to work with existing Forms W-4, Employee’s Withholding Allowance Certificate, that employees have on file with their employers. The IRS is working on a revised W-4 which will provide taxpayers information to help determine whether they want to adjust their withholding, as well as a revised withholding tax calculator on its website, expected by the end of February. At that time, the IRS will be encouraging taxpayers to check their withholding, and employers should expect requests from employees to submit revised W-4 and HW-4 forms.

For more information, refer to the IRS Withholding Tables Frequently Asked Questions, as well as the IRS Resources for Tax Law Changes.