IRS Provides Updated Withholding Guidance for 2014 (Notice 1036)

The IRS has released the updated income-tax withholding tables for 2014. The newly revised version of Notice 1036 contains the percentage method income-tax withholding tables. For 2014, the employee and employer tax rate for Social Security remains 6.2 percent. The Social Security wage base limit increases to $117,000. The Medicare tax rate is 1.45 percent each for the employee and employer, unchanged from 2012. There is no wage base limit for Medicare tax.

The additional Medicare tax of .09 percent must be withheld from employee wages that exceed $200,000 in a calendar year. The additional Medicare tax must be withheld beginning in the pay period in which the employee’s wages exceed $200,000 and continue until the end of the calendar year. The additional Medicare tax is only imposed on the employee.

As always, the IRS urges workers to review their withholding every year and, if necessary, fill out a new Form W-4 and give it to their employer. For example, individuals and couples with multiple jobs, people who are having children, getting married, getting divorced or buying a home, and those who typically wind up with a balance due or large refund at the end of the year may want to consider submitting revised W-4 forms.

Notice 1036, 2013FED ¶46,584

Other References:

Code Sec. 3401

CCH Reference – 2013FED ¶151

CCH Reference – 2013FED ¶33,546.021

Code Sec. 3402

CCH Reference – 2013FED ¶33,544.20

Tax Research Consultant

CCH Reference – TRC PAYROLL: 6,054.05


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