The new law is causing quite a ruckus in payroll offices around the country. Under the old law, the amount of tax withheld from paychecks was based on the number of allowances employees claimed on W-4 forms. And, the number of allowances was tied closely to the number of exemptions the worker claimed on his or her tax return. Starting in 2018, there are no exemptions, so there’s a mad scramble going on to figure out how to set withholding under all the new rules.
The new law orders the secretary of the Treasury to come up with a new system, but also says 2018 withholding can be based on the old rules. Keep an eye out on this one.
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