The Internal Revenue Service has issued a notice providing guidance for employees and employers on what to do with the Form W-4 under the new Tax Cuts and Jobs Act.
The new IRS notice also suspends a requirement that employees must give their employers new W-4 forms within 10 days of a change of status resulting in fewer withholding allowances.
The new guidance also specifies that the optional withholding rate on supplemental wage payments is 22 percent for taxable years 2018 through 2025.
In addition, it says that, for 2018, withholding on annuities or similar periodic payments where no withholding certificate is in effect is based on treating the payee as a married individual who is claiming three withholding allowances.
The new tax law that Congress passed last month has led to confusion among many employers and employees since it eliminates many longstanding provisions of the tax code, including personal exemptions. Earlier this month, the IRS updated the withholding tables in