Politico

IRS rolls out new tax withholding tables to align paychecks with tax law

Workers should soon see changes in their paychecks after the government on Thursday released so-called withholding tables explaining to employers how to align people’s paychecks with the new tax law.

The government also said it’s developing a new W-4 form that millions fill out at work for the next tax-filing season.

The administration is asking employers to implement the new tables by Feb. 15 so that workers will begin seeing the effects of the Tax Cuts and Jobs Act by next month.

The release comes amid warnings from Democrats that the administration could use the obscure tables to juice people’s paychecks this year, by withholding less from their pay, ahead of this year’s midterm elections. That could endanger the refunds people expect to receive next year.

Treasury Secretary Steven Mnuchin called the charges “ridiculous” on Thursday and said the share of people receiving refunds should remain unchanged. He added that the IRS is working on a new withholding calculator so people can see for themselves how the changes would affect them.

Most people will see increases in their take-home pay because of the new law, independent analysts say, though not everyone.

Sen. Ron Wyden (D-Ore.), the top Democrat on the tax-writing Finance Committee, has asked the nonpartisan Government Accountability Office to examine how the new tables will affect people’s withholding.

The Republican tax plan makes a slew of changes to the code, including ending the concept of personal exemptions, which have long been key to figuring out how much to withhold from people’s paychecks — which is why the government is now developing a new W-4 form it said will be released by the end of this year.

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