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e-News for Payroll Professionals May 23, 2018

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Issue Number:  2018-04

Inside This Issue

  1. Businesses can immediately expense more under the new tax law
  2. Section 45S employer credit for paid family and medical leave FAQs
  3. Tips for updating Form W-4 after doing a paycheck checkup
  4. Technical guidance
  5. New on IRS.gov

  1.  Businesses can immediately expense more under the new tax law

Tax year 2018 contains many changes due to the recent tax reform legislation. To keep small business owners informed and up-to-date on expensing and depreciation issues, the IRS recently released a fact sheet detailing new rules and limitations for depreciation and expensing under the Tax Cuts and Jobs Act.

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  2.  Section 45S employer credit for paid family and medical leave FAQs

The Tax Cuts and Jobs Act introduced a new general business credit for employers that pay employee wages during time away from work under the Family and Medical Leave Act (FMLA). Our frequently asked questions help explain what the Employer Credit for Paid Family and Medical Leave is and who can claim it.

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  3.  Tips for updating Form W-4 after doing a paycheck checkup

Following recent tax law changes, the IRS urges all taxpayers to look into whether they need to adjust their tax withholding. Taxpayers can use the updated Withholding Calculator on IRS.gov to do a “paycheck checkup” to help make sure they’re not having too little or too much tax withheld at work. Our website offers step-by-step instructions on using the tool.

Some taxpayers may need to use Publication 505, Tax Withholding and Estimated Tax, instead. This includes people who owe self-employment tax, the alternative minimum tax, or tax on unearned income from dependents, and people with capital gains or dividends.

Taxpayers who need to change their withholding must submit a new Form W-4, Employee’s Withholding Allowance Certificate to their employer.

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  4.  Technical guidance
  • Revenue Procedure-2018-30 provides the 2019 inflation adjusted amounts for Health Savings Accounts as determined under section 223 of the Internal Revenue Code.

  • Notice 2018-43, The Department of the Treasury and the Internal Revenue Service invite public comment on recommendations for items that should be included on the 2018-2019 Priority Guidance Plan. The Treasury Department's Office of Tax Policy and the Service use the Priority Guidance Plan each year to identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance

  • Revenue Procedure 2018-27 provides relief for taxpayers with family coverage under high deductible health plans (HDHPs) concerning the annual deductible contributions limit for their 2018 health savings accounts (HSAs) under Internal Revenue Code section 223. The maximum for family coverage was originally issued as $6,900 on May 4, 2017. On March 2, 2018, the limit was reduced to $ 6,850 for taxpayers with family coverage under HDHPs, pursuant to Tax Reform legislation that changed the calculation for 2018 and future years. This guidance allows taxpayers to continue to treat the 2018 limit as $6,900. It also provides clarifications on how taxpayers who already received a distribution from an HSA of an excess contribution based on the $6,850 deduction limit may treat the distribution as a mistake and repay the HSA without any tax or reporting consequences. It also clarifies how to treat a distribution of an excess contribution (and earnings) based on the $6,850 deduction limit.

  • Clarification of Procedures for an Employer to Claim the Qualified Small Business Payroll Tax Credit for Increasing Research Activities on Form 943 or Form 944

  • Notice 1439, Figuring the Amount Exempt from Levy on Wages, Salary, and Other Income - Forms 668-W, 668-W(ACS) and 668-W(ICS)

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  5.  New on IRS.gov


  • Form 944-X (SP), Adjusted Employer's ANNUAL Federal Tax Return or Claim for Refund (Spanish Version)
  • Form W-4S, Request for Federal Income Tax Withholding from Sick Pay


  • Inst W-2 and W-3, Instructions for Forms W-2 and W-3, Wage and Tax Statement and Transmittal of Wage and Tax Statements


  • Pub 15-B, Employer's Tax Guide to Fringe Benefits
  • Pub 505, Tax Withholding and Estimated Tax
  • Pub 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G
  • Pub 1335, Backup Withholding Questions and Answers
  • Pub 1494, Table for Figuring Amount Exempt from Levy on Wages, Salary, and Other Income (Forms 668-W(ACS), 668-W(c)(DO) and 668-W(ICS))
  • Pub 1693, SSA/IRS Reporter Newsletter
  • Pub 2104, National Taxpayer Advocate's Annual Report to Congress
  • Pub 1281, Backup Withholding for Missing and Incorrect Name/TINs (including instructions for reading tape cartridges and CD/DVD formats)
  • Pub 4163, Modernized e-File (MeF) Information for Authorized IRS e-file Providers for Business Returns
  • Pub 5078, Modernized e-File (MeF) Test Package
  • Pub 5258, Affordable Care Act (ACA) Information Returns (AIR) Submission Composition and Reference Guide

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