The 2018 Tax Cuts and Jobs Act
Gusto updated the income tax withholding tables for our customers on January 16, 2018 at 4:00 PM PT. Any payrolls run after that time will include the new federal withholding amounts for your employees. This means they may see a change to their take-home pay, also known as net pay.
Beginning in 2018, Congress made some changes to the tax code that will impact payroll, along with Corporate and personal taxes. For your reference, here's an overview of the changes from Congress.
The IRS published early release copies of the 2018 Percentage Method Tables for Income Tax Withholding on January 9, which included the changes made by the tax reform legislation that was enacted in December 2017. Employers were instructed to begin using the updated withholding tables no later than February 15, 2018.
For payrolls processed before the withholding tables were updated, the income tax amounts will reconcile at year-end when individual tax returns are filed.
If you have questions about how the new law will impact your corporate or personal taxes, please reach out to a certified tax expert who can provide guidance specifically tailored to your situation.