Federal Tax Reform: What It Means for Your Business

H.R. 1, the Tax Cuts and Jobs Act (the Act), was enacted on December 22, 2017 and generally became effective on January 1, 2018. In addition to a reduction in the corporate tax rate, the Act includes several significant changes that will impact payroll, employment tax, and employee benefits. Below is a summary of many of these changes. This guide will be updated as additional information, guidance, and resources become available. Employers should review the Act in detail and consult with appropriate legal and tax professionals before taking any action.

Withholding Tables,W-4 Forms, and Supplemental Wages

Qualified Transportation Fringe Benefits and Bicycle Commuting Benefits

Employee Achievement Awards

Business Entertainment, Amusement, and Recreational Activities

Qualified Moving Expense Reimbursements

Treatment of Private Company Stock Options

New Tax Credit for Paid Family and Medical Leave

A "qualifying employee" is any employee who has been employed for one year or more, and who, for the preceding year, had compensation not in excess of 60 percent of the compensation threshold for highly compensated employees (i.e., $72,000 for 2018 (60% of $120,000)).

If an employer provides paid leave as vacation leave, personal leave, or other medical or sick leave, this paid leave would not be considered to be family and medical leave. Leave paid for or required by a state or local government is also not taken into account.

There are many details to be determined through regulations, which are likely to take several months to complete. Employers who wish to take advantage of the new tax credit should consult with their legal and tax advisors. This tax credit would not apply to wages paid in taxable years beginning after 2019. to be added once approved.

Individual Mandate

Sexual Harassment Settlements and Nondisclosure Agreements

Additional Resources

Posted: January 2, 2018
Last Updated: September 27, 2018