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Change in Federal Withholding Tables
President Obama recently signed into law the American Recovery and Reinvestment Act of 2009. By implementing this new act, many employees will automatically see a reduction in their federal income tax withholding. You do not have to submit a Form W-4 (Employee’s Withholding Allowance Certificate) to get the automatic change.
For some employees, this change could inadvertently cause under-withholding of federal taxes. Employees with multiple jobs and dual wage households should review IRS guidance or consult a tax professional to determine whether they are withholding appropriately given the new tax law change. IRS Publication 15T provides this guidance. This publication can be found at the IRS website: www.irs.gov/pub/irs-pdf/p15t.pdf. If you are concerned that this change to the tax tables will result in an under-withholding of you federal income taxes, you may want to update your W-4 Form with your employer. Please remember, a decrease in the number of exemptions you claim will increase your federal income tax withholdings.
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