IRS Notice 1036 and IRS Publication 15-T, issued in February and March of this year, contain new income tax withholding tables which reflect the changes to the tax law made by the American Recovery and Reinvestment Act of 2009, including the Making Work Pay credit. In that Notice and Publication, the IRS indicated that employers should begin using these new tables as soon as possible, but in any event by April 1.
The new tables will result in reduced amounts of income tax withholding. On page 73 of Publication 15-T, the IRS indicated that an employee is not required to submit a new Form W-4 in connection with the use of the new tables. However, if an employee does not want to have his or her withholding reduced (because, e.g., the employee has more than one job, or the employee is married and the combined incomes will place the employee in a higher tax bracket), the employee should consider filing a new Form W-4. To avoid the withholding reduction, the employee may claim fewer withholding allowances on line 5 or request additional amounts to be withheld on line 6 of the form.