Withholding Tables & Form W-4 As part of the American Recovery and Reinvestment Act (ARRA) of 2009, the IRS has issued new withholding tables.  QuickBooks and (we assme) other commercially available accounting systems have updated their tax tables.  The IRS is mailing Publication 15-T to those they sent Publication 15, Circular E, to earlier this year.  The bottom line is that tax owed at year end may remain the same.  In other words, some people may be under withheld this year if they do not complete a new Form W-4.  The IRS website has a page (http://www.irs.gov/individual/article/0,,id=96196,00.html) where you can calculate your withholding.    The following notation is posted on the IRS web page:  "The Withholding Calculator will be updated soon, taking into account changes to the withholding tables that provide employees with the benefit of the new "Making Work Pay" credit that was reated by the ARRA of 2009.  Employers are allowed to implement the new withholding rates immediately." When the IRS web page is updated, you will need your most recent pay stub(s) and income tax return.  Complete all the applicable information.  If necessary, estimate value, remembering the results can only be as accurate as the input.  Consult the information links embedded in the program whenever you have a question.  Print out the final screen that summarizes your input and the results.  If necessary, complete a new Form W-4 and keep a copy for your records.   Below is the general information on the tax credit from the IRS website.   Attention Employers:  The IRS has issued updated withholding tables to help you implement the withholding adjustments required by the new economic stimulus law.  News release 2009-13 includes information about these tables. More details about the Making Work Pay credit are available in Publication 15-T, New Wage Withholding and Advance Earned Income Credit Payment Tables (for wages paid through 2009).   General Information For 2009 and 2010, the Making Work Pay provision of the ARRA will provide a refundable tax credit of up to $400 for working individuals and $800 for married taxpayers filing jointly.   This tax credit will be calculated at a rate of 6.2% of earned income and will phase out for taxpayers with adjusted gross income in excess of $75,000 for individuals and $150,000 for married couples filing jointly.   For people who receive a paycheck and are subject to withholding, the credit will typically be handled by their employers through automated withholding changes in early spring.  These changes may result in an increase in take-home pay.  The amount of the credit must be reported on the employee's 2009 income tax return filed in 2010.  Taxpayers who do not have taxes withheld by an employer during the year can also claim the credit on their 2009 tax return. It is not necessary to submit a Form W-4 to get the automatic withholding change.  However, an employee with multiple jobs or married couples whose combined incomes place them in a higher tax bracket may elect to submit a revised Form W-4 to ensure enough withholding is withheld to cover the tax for his or her combined income.  Publication 919 provides additional guidance for tax withholding.