Sage Delivers New 2018 Income Tax Withholding Tables with Service Release 2

On February 7, 2018, Sage released Service Release 2 (SR2) which delivers the new 2018 Federal Tax Tables for both Sage HRMS and Abra Suite. (Changes were not received in time for inclusion in Q4 2017 SR1.) All Sage HRMS and Sage Abra Suite users will need to apply the SR2 in order to update the tax tables. SR2 is now available for download from the Sage Knowledgebase.

More information about the tax tables and 2018 Form W-4

On January 11, 2018, in response to the Tax Cuts and Jobs Act that was signed into law by President Trump in December, 2017, the Internal Revenue Service (IRS) released Notice 1036 that updates the income tax withholding tables for 2018.

The release is designed to work with the W-4s currently on file and should be used by employers to make necessary changes to payroll systems. Employers should use these updated tables as soon as they are able and no later than February 15. Until employers implement the 2018 withholding tables, they should continue to use the 2017 withholding tables.

IRS working on new forms

The IRS is revising Form W-4 and the withholding calculator to reflect the new tax law. When the revised form and calculator are available, employees can use them to update their withholding. However, until the new 2018 Form W-4 is issued, both employers and employees should continue using the 2017 Form W-4.

Additional guidelines

To help employers apply recent tax law changes to withholding, the IRS has issued Notice 2018-12 (Guidance of Withholding Rules) and Publication 15 (the Employer’s Tax Guide). Here are a few highlights from the Guidance on Withholding Rules:

  • Employees experiencing a change in status that will reduce the number of withholding allowances are not required to furnish employers with new withholding certificates until 30 days after the 2018 Form W-4 is released.
  • Employees who have a reduction in the number of withholding allowances due solely to the changes made in the new tax law are not required to furnish employers with new withholding certificates during 2018.
  • Employees who choose to update their withholding may use the 2017 Form W-4 to report changes until 30 days after the 2018 Form W-4 is released.
  • New hires may claim allowances by using the 2017 Form W-4 until 30 days after the 2018 Form W-4 is released.

For additional information, refer to the documents listed below.

IRS sources:

Mary van Balen
Mary van Balen
Technical Writer at Delphia Consulting
Mary van Balen is based out of Columbus, Ohio and is a writer for Delphia Consulting. Mary contributes to the Delphia blog on Human Resources issues and Delphia Consulting and Sage product related updates.