2017 Tax Changes: Brace for Impact
tax-reform-tips

2017 Tax Changes: Brace for Impact

Top 10 Things Business Leaders Need to Know about Tax Reform

On Wednesday, January 31, Paycor hosted a webinar on the payroll implications of the Tax Cuts and Jobs Act of 2017. Here are the highlights.

Q1. What payroll related items were included in the Tax Cuts and Jobs Act of 2017?

There were a few different changes including:

  1. Revised tax brackets
  2. Suspension of personal exemption amounts
  3. Decrease in the optional flat withholding tax rate for those receiving up to $1M in supplemental wage payments
  4. Reduction in withholding rate for those receiving $1M or more in supplemental wage payments
  5. Elimination of tax-free employer reimbursements for moving expenses
  6. Definition of tangible personal property for employee achievement award

Q2. What were the exact changes in the supplemental wage rate?

  • For those receiving up to $1M in supplement wage payments in 2018, the rate changed from 25% to 22%.
  • For those receiving $1M or more in supplement wage payments in 2018, the rate changed from 39.6% to 37%.

Q3. Has the IRS released the actual tax tables yet?

The IRS released the tax tables that are used for the percentage method of income tax withholding. The percentage method is used by Paycor and most other payroll providers. The IRS has not yet released the full tables for the wage bracket method, but is expected to do so in late February along with the calculator.

Q4. When will all of these changes take effect?

Employers are required to implement the new tax tables by February 15th, 2018. (For clients, Paycor has already updated all impacted tax tables effective January 19, 2019.)

Q5. I'm receiving questions from employees about how they will be impacted. How can they confirm their withholding has been updated?

We suggest reviewing the withholding calculator on www.IRS.gov which will be revised with the new tax tables. The IRS estimates this will be updated by the end of February.

Q6. What about W-4s? Do we need to make all of our employees make updates to their W-4 withholding?

The IRS is still updating the W-4 form for 2018 and has not provided a release date.

Q7. What changes were made to the Affordable Care Act (ACA)?

The individual mandate penalty tax has been eliminated however all reporting elements remain.

Q8. Are there any outstanding state revenue tax tables affected by these federal changes?

  • Right now, the following states have delayed the release of their 2018 tax tables:
  • Colorado, Missouri, North Dakota, Oregon and Vermont
  • Other jurisdictions (such as Washington D.C.) have indicated they may release revised 20-18 tables in light of the federal legislation. We are monitoring these changes closely.

Q9. It looks like some benefits were impacted by this change, what should we know?

One of the biggest changes is around moving expenses. These expenses are now completely taxable. There were also changes in commuter benefits.

Q10. What should we do in regard to our corporate or personal tax changes?

For any changes included in the bill regarding corporate or personal tax changes, you should contact your CPA or tax advisor.


Subscribe to Our Resource Center Digest

To stay up-to-date on tax and compliance issues, subscribe to our newsletter.

Check your inbox for an email confirming your subscription. Enjoy!

More to Discover

Employer Responsibility: What Businesses Need to Know

Employer Responsibility: What Businesses Need to Know

Employers have plenty of responsibilities on their plates when it comes to managing employees – everything from properly paying them to providing a safe and healthy work environment. With so many requirements (and potential pitfalls), employers would be wise to look for the expertise of a trusted and reputable partner to help shoulder the burden. Whether you’re just starting out with a new small business or you’re responsible for the HR department of a larger company, here are just a few things you need to ensure you’re doing right when it comes to employer responsibility. Paying Employees You’re required by federal law to pay your employees at least the minimum wage of $7.25 an hour unless they receive tip income or are otherwise not...

SMB

Defining the Lookback Period

Defining the Lookback Period

Many small business owners struggle to keep up with the laws and regulations that come with taxes, especially payroll taxes. Navigating tax codes can be a full-time job and a never-ending challenge. As you try to stay up-to-date with ever-changing legislation and payments that need to be made, you still need to run your business. But there’s yet another aspect of tax law that can cause heartburn: the lookback period. What is a lookback period? A “lookback period” is the length of time the IRS uses to make sure that your previous tax filings were correct. It determines your deposit timetable for paying FICA (Medicare and Social Security taxes) and federal income tax. The lookback period applies to different types of filings and varies in...

CFO

Compliance Guide for Finance Leaders

Compliance Guide for Finance Leaders

As part of our commitment to help Finance leaders make a difference in their organizations, we’ve published this compliance deep dive to help you stay current and effective in a fast-paced and changing world. Inside you’ll learn: How to maintain compliance with federal regulations through the employee lifecycle Potential violations to watch for and tips to avoid them Expert advice on how HR can mitigate risk Complete the form and get your 2019 Compliance Guide instantly.

HR COE Compliance Benchmark Quiz

HR COE Compliance Benchmark Quiz

Is your organization at risk? The path to achieving excellence in compliance is a continual journey that evolves over three phases. To find out what phase you’re in and get a customized action plan. TAKE OUR QUIZ TO FIND OUT: Quiz will load down below shortly Content loading... Please enable javascript! Compliance Benchmarking Quiz What’s preventing you from attracting and hiring top talent? To get to the next level, analyze your current compliance practices to find out where you are at risk. Then develop strategies to address those problem areas. Based on your responses, you’re in Phase 1: To get to the next level, look for the right technology to proactively monitor compliance. When you find the right fit, invest in technology to lay...