The Consolidated Appropriations Act, 2018, was signed on March 23 by President Trump. The purpose of this act, also known as H.R. 1625, is to fund the federal government for the remainer of the fiscal year, which ends on September 30. Why is this important for you to know? This act directly affects payroll professionals, funding the IRS and E-Verify, and changing tip regulations.
As a result of this act the IRS is suggesting that employees perform a “paycheck checkup” because of the changes that Trump implemented. The IRS wants employers to notify their employees to do this in order to make sure they are having the right amount of tax withholding. They made the specification of a few, select groups of taxpayers to check their tax withholding. These groups include, but are not limited to:
- Families or households with two incomes
- People with a child or dependents
- People with itemized deductions
- People who earn high incomes and have complex tax returns
- People receiving large tax refunds or had large tax bills as of 2017
Resources from the IRS
The IRS wants employees to use their Withholding Calculator which is on their website, in order for you to get an accurate check. They have also launched a campaign to help employers and employees understand the new act. This campaign includes Youtube videos and a special Tax Tip series. They are very concerned with helping people understand these changes so that they won’t have their taxes withheld improperly. The purpose of the calculator is for employees to make sure that they are not having their employers withhold too much or too little. If employees find that they need to adjust their withholding they should fill out a new 2018 Form W-4, Employee’s Withholding Allowance Certificate and give it to their employer.
One of the changes that was mentioned impacts E-Verify and PayPros is now handling E-Verify right in our software! If you have any questions about E-Verify and the impact of the act give us a call at 866.445.2524,and for more information visit www.irs.gov/withholding.