The Payroll Report: Jan. 29 to Feb. 2


IRS steps


The effective date to claim exemption from income tax withholding using Form W-4, Employee’s Withholding Allowance Certificate, was extended to Feb. 28 from Feb. 15, the Internal Revenue Service said Jan. 29 in Notice 2018-14.

Because the 2018 Form W-4 has not yet been released, employees may claim exemption using the 2017 Form W-4 until 30 days after the 2018 Form W-4 is released, the notice said. 

The IRS on Jan. 29 also released Publication 15 (Circular E), Employer’s Tax Guide, for 2018.

A final rule on payroll debit cards that was issued Jan. 25, 2018, by the Consumer Financial Protection Bureau modifies elements of the rule as it had been proposed regarding digital wallets that may store funds, the resolution of errors, and limitations on liability for unverified prepaid accounts.

The effective date of the final rule (RIN 3170-AA72) and its amendments is April 1, 2019. 

The final rule expands federal consumer protections available to users of prepaid products, including payroll cards, by amending Regulation E, which implements the Electronic Fund Transfer Act, and Regulation Z, which implements the Truth in Lending Act, and official interpretations of those regulations with regard to prepaid cards.

Publication 1494, “Tables for Figuring Amount Exempt from Levy on Wages, Salary, and Other Income (Forms 668-W(ACS), 668-W(c)(DO) and 668-W(ICS)),” is to be revised in February, James Malanska, IRS senior policy analyst for collection policy and enforcement, said Feb. 1 during the monthly IRS payroll industry teleconference.

The 2018 version of Publication 1494, which was released by the IRS in early January, was only adjusted for inflation and does not reflect changes that need to be made because of the passage of the tax-code overhaul, which was signed into law Dec. 22, 2017 (Pub. L. 115-97), Malanska said.

Questions about the many changes to the taxation of employee benefits are to be addressed in the 2018 Publication 15-B, Employer’s Tax Guide to Fringe Benefits, said Scott Mezistrano, IRS representative for industry stakeholder engagement and outreach. A date is not set for the publication’s release, he said.


Idaho revised its 2018 unemployment tax rates, retroactive to Jan. 1, 2018.


Employers are not required to deduct from fast-food workers’ wages amounts that the workers ask to be paid to certain not-for-profit organizations, at least until March 30, 2018, a New York City district court ruled.

The U.S. District Court, Southern District of New York issued an order on Jan. 17, 2018, that temporarily halts enforcement of the requirement and its associated rules until March 30, 2018, or the resolution of the lawsuit, whichever occurs first. 

The lawsuit is related to several measures (Int. 1384-2016, 1387-2016, 1388-2016, 1395-2016, 1396-2016) that were signed into law by New York City’s Mayor Bill de Blasio (D) on May 30, 2017, and that took effect Nov, 26, 2017. The measures are collectively known as the Fair Workweek law. 

At issue is a requirement (Int. 1384-2016), known as the Deductions Law, that says New York City fast-food employees may request to have part of their salary deducted and paid to not-for-profit organizations of their choosing that are approved by the New York City Department of Consumer Affairs. Employers must deduct and remit donations to such not-for-profits. 

The Restaurant Law Center and the National Restaurant Association challenged the Deductions Law, claiming that it violates the First Amendment and is preempted by the Labor Management Relations Act and the National Labor Relations Act. 

By Jamie Rathjen

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