The Internal Revenue Service published the new income-tax withholding tables to conform to the sweeping $1.5 trillion tax overhaul, the first major rewrite of the tax code in three decades, which became law last month and took effect Jan 1.
The department's inspector general launched the investigation after Treasury Secretary Steven MnuchinSteven Terner MnuchinMark Mellman: History's judgment Trump's motorcade greeted with chants of "lock him up" in NYC Treasury watchdog probes lack of tax plan analysis from Mnuchin MORE faced intense criticism over the scoring of the GOP tax plan. Employers will have until February 15 to incorporate the changes in their payroll systems. That means employees could start seeing the changes reflected in their paychecks next month, the IRS said. The time it will take for employees to see the changes in their paychecks will vary depending on how quickly the new tables are implemented by their employers and how often they are paid - generally weekly, biweekly or monthly.
The money going into the pockets of Americans is a direct result of the tax cuts promised by President Trump.
Workers will see changes in their February paychecks once employers adopt the new guidance, the news release said.
"These new tables will help deliver the tax cuts as soon as possible to as many Americans as possible, with as little disruption as possible", Treasury Secretary Steven Mnuchin said at a White House briefing.
Individual taxpayers aren't required to make any changes to their Form W-4 right now.
"Such a calculator will ask for anonymous inputs - for example, your income, number of dependents and other pieces of information that help determine whether you might be eligible for various tax breaks", CNN Money noted.
The Republican tax bill that Trump signed into law in December lowered individual tax rates through 2025 and almost doubled the standard deduction that families can use to reduce taxable income.
Reduced tax rates don't necessarily mean a lower tax bill for 2018.
Mnuchin addressed the possible government shutdown, the debt ceiling, and the new tax law during a talk at the Economic Club of Washington DC.
But it also eliminated a $4,050 personal exemption for each household member until 2026 and scaled back a popular deduction for state and local taxes.
Notice 1036 also said that employers could withhold on supplemental wages of up to $1 million at a flat rate of 22 percent. Taxpayers won't file their 2018 returns until next year, following normal procedure.