On Dec. 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act. This legislation will impact the amount of federal income tax that is withheld from your paycheck. In general, the impact of this legislation is to reduce the amount of federal income tax withheld from your paycheck, thus increasing your net pay.
The Internal Revenue Service has released the new federal income tax withholding tables for 2018. These new tables will be used beginning with your Jan. 31, 2018 paycheck. The impact of this tax change will vary by individual, depending on your income, filing status (single or married), the number of withholding allowances you claim, etc. The Iowa state income tax withholding formula is based in part on the amount of federal income tax that is withheld from your paycheck. If your federal income tax withholding decreases, you will likely see a slight increase in the amount of state income tax withholding.
You can model the impact of this tax change through the Employee Online tab on your Employee Dashboard. In the left-hand navigation area under “Pay Check” click on “What If,” then click on “Create Baseline” in the bottom center of the screen (it may take a few seconds to calculate). This will provide a very close estimate of your Jan. 31 paycheck. You can compare this to your Jan. 12 pay stub on Employee Online to see how this tax change impacts your paycheck.
If you have any questions, contact Steve Jordan, Senior Payroll Specialist, at ext. 14908.
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