Payroll update – according to Coastal Payroll / Isolved
Planning for Tax Year 2025
Recently, the Internal Revenue Service (IRS) announced there will be no changes to some information returns and withholding tables for Tax Year 2025 related to the new law.
According to the IRS https://lnkd.in/gZd7SxjA
Form W-2, existing Forms 1099 and Form 941 will remain unchanged for 2025
There will be no change to federal income tax withholding tables in 2025
Employers and payroll providers are advised to use existing procedures for reporting and withholding
While the bill does introduce sweeping new changes, like fewer taxes to tips and overtime, employers should continue to use current procedures for withholding and reporting.
Looking Ahead to 2026
Why the delay in impact? The IRS requires additional time for tax professionals to implement changes. The IRS is working on new guidance and updated forms for Tax Year 2026. Major changes are expected in how tips and overtime pay are reported. The IRS indicates it will coordinate with employers, payroll providers and tax professionals to ensure a smooth transition.