Did you recently notice a bump in your paycheck, but realized it has nothing to do with a new raise? If you haven’t yet, that increase may be coming for your next paycheck. On January 11, the Internal Revenue Service (IRS) released Notice 1036 on their website. This notice updated guidelines for how much tax employees will see withheld from their checks.
What does this mean?
These new guidelines come as the IRS begins improving the accuracy of withholding based on new tax laws. The most important revisions are to avoid over- and under-withholding. According to the IRS, these new deduction tables should result in take-home pay increases for approximately 90 percent of employees.
Business Insider broke down the new tables for single employees making between $509 and $1,631 every two weeks. In this case an employer should be withholding $36.70 and an additional 12 percent of every dollar more than $509. Going a step further if an employee makes $1,500 they would have $155.63 withheld.
Employers should implement the new withholding tables no later than February 15, so your increase could still be coming. As an added update, the IRS is revising their tax-withholding calculator on irs.gov so it will accurately calculate the amount to be withheld from your take-home pay. The new calculator should be available at the end of February, according to the IRS press release for the new tables.