Tracking late-in-the-game 2018 updates

 

By now you’d like to have the 2018 changes set in your payroll system, but with a topsy-turvy year-end like this one, that’s not possible. First, in a highly unusual move, the SSA decided to revise next year’s Social Security taxable wage base.

 

The new number is $128,400

 

That’s close to – but slightly lower than – the number the SSA announced on Oct 13, 2017.

 

That was $128,700.

 

So what led the SSA to tweak such an important number at the 11th hour?

 

The agency received a large batch of corrected W-2s in late October 2017. A national payroll service provider sent in 500,000 corrected W-2s from Tax Year 2016. That changed the national average wage, one of the figures used to determine the taxable wage base.

 

Uncertainty with Form W-4

 

Meanwhile, other national news heaped on the uncertainty as Payroll rolled into year-end – namely, the debate over tax reform.

 

Although revisions to Form W-4 aren’t usually dramatic from year to year, major tax reform could result in big changes to the form.

 

Something as simple as asking employees to submit a new W-4 if they think they’ll need to adjust their withholding for 2018 couldn’t take its usual course. After all, employees need to know their tax bracket before they can revise their W-4s.

 

Question marks also appeared next to some fringe benefits, including ones it’d been a given for a long time about not needing to withhold taxes.

 

Take employee achievement awards, for example. If a manager tells an employee, “Congratulations, here’s your watch,” and then Payroll follows up with “By the way, that’s now taxable,” some of the positive effect is lost.

 

Same goes for dependent care assistance programs. The thought of not being able to exclude up to $5,000 from an employee’s income for that fringe benefit created unrest for employees and employers alike.

 

More info: www.ssa.gov/news/press/releases/2017/#11-2017-1