Employers may begin using these tables immediately, though they have until February 15 before they're required to do so.
Many employees will begin to see increases in their paychecks to reflect the new law in February. "Our objective is not to have taxpayers over-withheld, so they owe money at the end of the year", Mnuchin said Thursday during the news conference.
Lawmakers in blue states have been considering strategies to work around the federal tax overhaul's $10,000 cap for deductions on state and local taxes, or SALT, with some floating concepts that would allow taxpayers to make charitable donations to state funds, offsetting SALT.
The department's inspector general launched the investigation after Treasury Secretary Steven MnuchinSteven Terner MnuchinMark Mellman: History's judgment Trump's motorcade greeted with chants of "lock him up" in NYC Treasury watchdog probes lack of tax plan analysis from Mnuchin MORE faced intense criticism over the scoring of the GOP tax plan. "Payroll withholding can be complicated, and the needs of taxpayers vary based on their personal financial situation".
Lisa Zarlenga, a partner at Steptoe & Johnson LLP in Washington, told Bloomberg Tax in an email that "the tax law generally reduced individuals' tax liabilities, so I expected that withholding would go down". "Taxpayers can not make these changes until the revised Form W-4 is published, which the IRS has announced will be forthcoming in the coming months". Taxpayers are encouraged to use the calculator to adjust their withholding once it is released.
Treasury says 90% of workers will see increase in take-home pay starting next month
Treasury released a brief one-page analysis of the plan on December 11, claiming the proposal would increase tax revenue by about $1.8 trillion over 10 years.
Most people fill out their W-4 form when they're hired at a new job and don't change it unless they get married, have kids, get divorced or experience other life-changing situations. The effort will be created to help workers ensure that they are not having too much or too little withholding taken out of their pay. "With the child tax credit, like, 'Is it true that will increase?' Yes, it increases, but not with the 2017 tax year, for the 2018 tax year", said Curtis.
For 2019, the IRS anticipates making further changes involving withholding.
Later this year, the IRS expects to revise the Form W-4, which employees use to ultimately determine how much of their pay is withheld toward income taxes.