Republicans predict paychecks will grow as IRS issues new tax withholding guidelines

Glen Norman
January 12, 2018

The Treasury Department estimates that 90% of individual taxpayers will see an increase in their take-home pay.

In rushing the process, the Treasury Department is asking companies to rely on outdated forms to help determine how much to withhold. Workers will see changes in their February paychecks once employers adopt the new guidance.

"The bottom line here is Democrats so object to Americans keeping more of what they earn at work, they'll do and say just about anything to cast doubt on it", he added.

If they find their paychecks are inaccurate, it will be incumbent on the employees to tell their employers to make corrections.

Secretary of the Treasury Steven Mnuchin speaks during a press briefing at the White House Thursday.

The new guidelines incorporate lower tax rates that were central to the tax overhaul from Congress's December tax overhaul. "We had existing technology".

The IRS is encouraging employers to implement the new withholding tables by February 15. Underwithholding would lead to taxpayers owing more when they file their 2018 returns next year. "Then they can decide what they want to do", the senior IRS official said.

The impact of the new tax law is expected to be a major campaign issue this year, as Republicans battle Democrats for control of the House and Senate in the November election. Even before the new tax law was passed, the agency expected to be able to answer about 60 percent of public calls during tax season and 40 percent for the full year.

"Republicans are using brute force and speed to implement a law that will deliver a financial blow to hardworking Americans all across the country", Sen. Ron Wyden (D-Ore.) said in response.

"The Administration's monumental tax reform legislation continues to provide economic benefits for hard-working Americans".

For example, there is a new $10,000 limit on the amount of state and local taxes a household can deduct from federal income. California, New York and New Jersey are among the states that have been considering changes to their tax codes to blunt the pain that their residents could feel from the scaling back of the state and local tax deduction in the new law.

While employers can begin doing this voluntarily, they will have to comply with the new guidance by February 15. Trump said lower taxes and deregulation will rev up the rural economy in a partisan speech geared toward a much broader audience than the farmers gathered to hear him. Employers and payroll companies will now be required to process and implement those changes.

The lower rates, an expanded standard deduction, and a larger Child Tax Credit are projected to reduce taxes for American workers and business owners by $180 billion in 2018, according to the Joint Committee on Taxation.

Other reports by

Discuss This Article