The U.S. Treasury Department and IRS this afternoon released for publication in the Federal Register a notice of proposed rulemaking (REG-132741-17) as guidance for employers concerning the amount of federal income tax to withhold from employee wages.
The proposed regulations [PDF 373 KB] (29 pages as published in the Federal Register) implement changes made by the 2017 U.S. tax law (Pub. L. No. 115-97)—the law that is often referred to as the “Tax Cuts and Jobs Act” (TCJA).
Accordingly, the regulations proposed changes to the existing regulations under Code sections 3401 and 3402, and in general would update those regulations to conform to the changes made by the TCJA and other legislation enacted since the regulations were last revised.
The preamble to the proposed regulations further states that these regulations are designed to accommodate the redesigned 2020 Form W-4, Employee’s Withholding Certificate, and related wage withholding tables and computational procedures established by the IRS and reflected in Publication 15-T, Federal Income Tax Withholding Methods.
According to a related IRS release—IR-2020-28—the proposed regulations do not require employees to furnish a new Form W-4 solely because of the redesigned Form W-4. The IRS release further explains:
The proposed regulations were published in the Federal Register on February 13, 2020. Comments and requests for a public hearing are due by April 13, 2020.
The purpose of this report is to provide text of the proposed regulations.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.