The Kansas Department of Revenue published new withholding tables today, so employers know how much to withhold from employee paychecks. Employers will begin withholding a larger amounts for taxes thanks to a retroactive tax increase lawmakers passed a few weeks ago.
“There are a lot of variables with tax increases. It’s best to be prepared well in advance to ensure it doesn’t destroy your budget,” Kansas Department of Revenue Secretary Sam Williams said.
In order to meet the demands of the retroactivity, the revenue department used 2018 tax rates in the new withholding tables. The decision will ensure that employers withhold enough income to catch up on back taxes in the second half of the year, and the 2018 withholding tables will provide some certainty for Kansas employers.
Williams said all businesses will have to increase withholding amounts because of the new tax law.
“We made the decision that it was best to address both the retroactivity and the fact that the rates will change again January 1 within these new withholding tables,” Williams said in a release.
The withholding tables are designed to help employers determine the amount of taxes to withhold from employee paychecks, but Williams recommends individuals speak with a tax preparer to ensure enough is being withheld to meet their new tax obligations.
Williams advises business owners to make quarterly payments to avoid enormous tax bills next April, as the new law places taxes on non-wage business income. Business owners will not be penalized for interest or underpayment as long as their taxes are paid in full by April 17, 2018.
The new withholding tables are available here.
The official notices that address the new tax law are available here.