IRS Releases New Form W-4 and Updated Withholding Calculator

03/02/18 | 8:00AM | Posted by TEAM Software



Remain compliant with the recent changes from the Tax Cuts and Jobs Act of 2017.


The IRS released a new Form W-4 and updated withholding calculator on Wednesday, February 28, for the 2018 tax year. These new tools are in response to the Tax Cuts and Jobs Act of 2017 (TCJA). Employers and employees should now begin using the updated tools for the 2018 tax year.



Employees can use the updated Withholding Calculator to make sure they have the right amount of taxes deducted from their paychecks and update the new Form W-4 as necessary. Employees who have simple tax situations – such as single person, with one job and no dependents – might not need to make any updates, but for those with more complicated situations, the IRS suggests performing a “paycheck checkup” with the calculator. Those complicated situations could include:

  • Have two incomes or are in two-income families.
  • Work only part of the year.
  • Have dividends or capital gains from securities held in taxable accounts.
  • Claim the Child Tax Credit, the Earned Income Tax Credit or other credits.
  • Itemized deductions in 2017.
  • Have high incomes and more complex tax returns.


The IRS also has a handy frequently asked questions list to answer those common questions.


The IRS has helpful information about the recent changes on its website, including a roundup of updates surrounding the legislative impact on tax forms, frequently asked questions list and general information about the Form W-4.


Here’s a quick summary of the changes to the W-4:

  • Box 5 instruction change
  • Box 8 instruction change

Enter the employer’s name and address. If the employer is sending a copy of this form to a State Directory of New Hires, enter the address where child support agencies should send income withholding orders.

  • Box 9 — report the first date of employment

If the employer is sending a copy of this form to a State Directory of New Hires, enter the employee’s first date of employment, which is the date services for payment were first performed by the employee. If the employer rehired the employee after the employee had been separated from the employer’s service for at least 60 days, enter the rehire date.


If you live in one of the states that uses the Federal W-4 and/or taxable earnings for reporting, we’re still waiting for direction on that, so stay tuned. For reference, the following states follow the current Federal W-4: Nebraska, Idaho, Minnesota, Montana, North Dakota, South Carolina, Utah, New Mexico, Oklahoma, Colorado, Delaware and Oregon.


As an employer, it can be hard to know where to find the most current information. Here are some helpful resources to help you stay up-to-date: