Update on Impact of Federal Tax Reform
Faculty and Staff,
As you may have noticed changes in your most recent paycheck, the following are reminders regarding the impact of federal tax reform to your compensation:
- The IRS withholding changes were implemented with the February 9th biweekly and February 28th monthly payrolls.
- As a result, most employees noticed that their taxes withheld decreased and their takehome pay increased.
- For employees who had a retroactive change for a prior 2018 pay period, SAP recalculated payroll for those employees and applied the withholding changes retroactively to January. The result of that recalculation for most employees is that their net pay in February is more than normal – absent other changes such as modifications to benefits.
As we previously communicated:
- The IRS reports that employees do not have to do anything at this time as the new withholding tables are designed to work with existing W-4 forms employees have on file.
- A new withholding tax calculator and Form W-4 developed by the IRS are now available. More information is available on the IRS website. The calculator can be accessed here.
- Employees who wish to update their withholding in response to the new law or changes in their personal circumstances in 2018 can use the new withholding calculator and Form W-4.
We encourage employees to review additional information about the new withholding tables and answers to frequently asked questions
UK Human Resources has provided ideas for employees interested in ways to use additional take-home pay to reach financial goals at Financial Well-Being Ideas.
Please contact Payroll Services at 859-257-3946 if you have questions regarding your paycheck.
Eric N. Monday
Executive Vice President for Finance & Administration