Stimulus Withholding Tables Released

I thought this news warranted a special release.  The new withholding tables related to the recently signed Stimulus package, called the “American Recovery and Reinvestment Act of 2009″ have been released. You can download a copy here.  These will ultimately be incorporated in Publication 15-T when that is released to the IRS website.  The significant changes include”

• increasing the amount at which withholding begins to $7,180 for single filers and $15,750 for married filers.
• changes to the income amounts for the 10%, 15%, 25% and 28% bracket
• changes to the calculation of the Earned Income Credit, but not the maximum amount of the credit.

There is no change to Social Security and Medicare withholding and no change to the value of an allowance.  The instructions indicate that employers should begin using the new withholding guidelines as soon as possible but no later than April 1, 2009.  This will increase the amount of take home pay in most paychecks by reducing withholding.  It should be interesting to see follow up comments on this issue.  The change was pushed through so quickly that there are bound to be problems with implementation and certain employers not being notified of the new rates.