New withholding tables are here!
February 25, 2009 by Carol KatarskyPosted in: Best practices, Communication, Hiring & training staff, In this week's e-newsletter, IRS regs, Latest news & views, Tax compliance
You’ll need to act fast. Your company must be using the new rates no later than April 1.
The new rates are the feds’ method of implementing the “Making Work Pay” credit in the recently passed stimulus package.
The new withholding tables are in effect for wages paid through Dec. 2009. The tables, as well as instructions on how to comply with the new law, will be incorporated into a new IRS Publication 15-T. Pub. 15-T will be posted on IRS’ site next week, and mailed to employers in mid-March. But you can already get a sneak peek here.
Until you get the final, official publication, here are the key points you need to know:
- IRS requests employers start using the new withholding tables as soon as possible, but no later than April 1.
- Workers don’t need to submit a new W-4 to get the credit, but they will have to claim it when they do their ’09 taxes. (Note: Workers who have multiple jobs may want to review their W-4s to ensure they have enough withholding being done.)
Note: The credit phases out for higher-income employees. Be prepared for questions from them, and other employees who may not understand how the tax credit works or how they can get the benefit.
Tags: Employee communication, Employment Taxes, IRS, New legislation, Payroll, Resource, Withholding rates
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March 5th, 2009 at 12:44 pm
So does this mean that come year end and the politicanns have not changed the tax rates people who usually expect a refund or break even will end up paying in on their 2009 tax return? Does not seem like it is worth geting the credit now if that is the case.
March 5th, 2009 at 2:31 pm
The housing market needs to be stabilized, first and foremost. The government should make available a loan program for all primary homeowners who occupy their primary residence, not just those homeowners who were irresponsible or those currently in trouble. The loan program would have a maximum loan amount of $80,000 or the current outstanding loan balance; whichever is less. This new government loan could be a first or second mortgage depending on the outstanding loan balance at the time of closing. The borrower would have to personally guarantee the loan which would be made at the current interbank loan rate which would be either the federal funds rate or federal discount rate, plus 100 basis points which would equate to a maximum of 1.5% currently. 100% of these government loan proceeds would go to the financial institution holding the mortgage.
This loan program would provide the financial institutions with liquidity while at the same type reduce the mortages that they are currently holding (ie. kill two birds with one stone), provide homeowners who occupy their primary residence some relief if they are willing to personally guarantee a loan up to a maximum of $80,000 at 1.5%, help minimize and/or mitigate home foreclosures and allow all occupying primary homeowners the opportunity to benefit from this loan program.
This type of loan program would require accountability from the borrowers, flush out the borrowers who are unwilling to guarantee their loan and provide a big step in stabilizing the housing market.