The contentious tax overhaul is beginning to deliver a change that many will welcome — bigger paychecks.
Workers are starting to see more take-home pay as employers implement the new withholding guidelines from the IRS, which dictate how much employers withhold from pay for federal taxes. Those whose checks have remained the same shouldn’t fret — employers have until Feb. 15 to make the changes.
Treasury Secretary Steven Mnuchin has estimated that the new rules will mean more take-home pay for about 90 percent of American workers.
How much extra cash? It depends on several factors, such as workers’ income, how often they are paid and the number of withholdings allowances they claim on their IRS Form W-4 with their employer.
Those whose employers were quick to make the change welcomed the extra money — anywhere from a few dollars to a few hundred dollars.
Wayne Love, who works in managed care in Spring Hill, Florida, got an extra $200 in his paycheck last week, which he said will help offset a $300 increase in the cost of his health insurance.
“I have heard time and again that the middle class is getting crumbs, but I’ll take it!” Love said by email.
Julia Ketchum, a secretary at a public high school in Lancaster, Pennsylvania, said she was pleasantly surprised her pay went up $1.50 a week. She didn’t think her pay would go up at all, let alone this soon. That adds up to $78 a year, which she said will more than cover her Costco membership for the year.
And Todd Anderson of Texas and his fiance, who are both educators, got an extra $200 in their paychecks combined that they plan to use to cover the costs of a second baby on its way.
According to the nonpartisan Tax Policy Center, a middle-income household would on average get a tax cut of $930 this year, lifting their after-tax income by about 1.6 percent. That increase won’t be perfectly reflected in their paycheck though.
That’s because lower tax withholding on paychecks is just a piece of a complicated set of changes to tax law that the GOP pushed through in December. And what your employer withholds is based on an estimate of your tax obligation that includes many complex factors, but it’s not a perfect measure.
As a result, taxpayers may find they are unintentionally over- or underwithholding for their taxes if they don’t do some legwork.
Sen. Ron Wyden, on the Senate Finance Committee, and Rep. Richard Neal, on the House Ways and Means Committee, both Democrats, have asked the Government Accountability Office to analyze the new tables to make sure workers’ paychecks weren’t being systematically underwithheld, which would make paychecks bigger now but lead to a bigger bill at tax time. Mnuchin, speaking at a White House press briefing, dismissed this notion as “ridiculous.”
Still, experts suggested that all taxpayers take a look at the new IRS calculator when it becomes available later in February to ensure they are having the correct amount withheld. And they should update the information on their W-4 after the IRS releases a revised version this year.
For most people though, no change will be needed.
The IRS said the new withholding tables should produce an accurate withholding amount for people with simpler tax situations. But tax experts said those who will still itemize, have larger families or more complicated tax situations may want to take a closer look.
“If they haven’t done it before, this is a really good year to talk to your tax professional,” said Pete Isberg, vice president of government relations for ADP, a payroll provider.
The IRS, payroll and tax professionals have been scrambling to react to the passage of the new tax law. And the IRS said it plans to make further changes involving withholding matters in 2019. Many in the industry said they expect the IRS to update the W-4 form in 2019 in a more dramatic fashion to fully reflect the scope of the law.
No worker should anticipate a negative impact from the new withholding table if their pay remained the same, said Joseph Rosenberg, a senior researcher at the nonpartisan Tax Policy Center.
However, someone who got a raise may face a higher tax rate as a result. And some corporations have been handing out bonuses and wage increases in reaction to passage of the law. A worker’s net pay may also fall if other factors that go into their paycheck changed — such as an increase in health insurance premiums or higher state taxes.
Still, a little extra money in the hands of most Americans may also help boost support of President Donald Trump and his tax plan. Trump and the Republican backers of the plan have deflected criticism of the legislation, insisting that Americans will come to love the new law when they see their heftier paychecks.
Some workers received the increase with mixed emotions though.
“It’s tough to be upset about more money in my pocket,” said Jefferey Snively, an aerospace engineer who got a 4 percent bump in his last paycheck due to the lower tax rate.
He said that’s not enough to feel like a windfall or change his spending habits, but is a pleasant change. Yet, he thinks the tax overhaul wasn’t really about him or other workers, but more about corporations and the wealthy.
“I think the people this bill made the most difference for are the ones who needed it least,” he said.
Each legislative session thousands of bills and amendments are introduced in the Pennsylvania Legislature. Only a fraction become law, and an even smaller portion receive wide media coverage.
These bills impact the lives of people living in Pennsylvania every day.
Each week The Sentinel will highlight one bill that has not received widespread attention.
About the bill
Pennsylvania is getting older.
Between 2009 and 2016, the number of people living in Pennsylvania aged 65 or older grew by more than 200,000, according to the U.S. Census Bureau.
As the state’s population ages, so too has the population of people being held in state prison.
Inmates aged 65 or older in state prisons more than doubled between 2009 and 2016, according to the state Department of Corrections.
A bill introduced by two state representatives would offer an alternative to incarceration for elderly and infirm inmates.
House Bill 2046, introduced by Rep. Stephen Kinsey, D-Philadelphia, and Isabella Fitzgerald, D-Philadelphia, would allow certain elderly inmates to petition for medical parole.
To qualify, an inmate would have to be over the age of 55 and permanently medically incapacitated, suffering from a terminal illness or over the age of 65 and has served at least 25 percent of his or her sentence.
In both cases, the inmate cannot have a prior or current conviction for a violent crime, which includes sex offenses, aggravated assault and arson.
A petition for parole does not guarantee the inmate’s release.
While the bill excludes several violent crimes, these kinds of offenses tend to be committed by younger men, and people generally age out of criminal behavior.
For example, more than 65 percent of the people charged with aggravated assault in Pennsylvania in 2016 were 35 years old or younger at the time of their offense, according to an analysis of court records conducted by The Sentinel.
About 2 percent were over the age of 60 and less than 1 percent were 65 years old or older, according to court records.
The drop off was even more stark for individuals charged with robbery. Nearly 80 percent of people charged with robbery in Pennsylvania in 2016 were 35 years old or younger, with nearly half being less than 26 years old, according to the analysis.
Less than 1 percent were over the age of 60 at the time of the offense, court records showed.
Sportsmen near and far are gearing up for the 2018 Great American Outdoor Show, which opens this Saturday at the Pennsylvania Farm Show Complex in Harrisburg and continues daily through Feb. 11.
Touted as the World’s Largest Outdoor Show, the nine-day sporting show offers more than 1,100 exhibitors and nine exhibit halls stretching across 650,000 square feet. Exhibit halls are themed around archery, boats, fishing, hunting outfitters, outdoor products, RVs and shooting sports. More than 400 outfitters and fishing charter captains also are expected to be on hand, according to a news release from the National Rifle Association, which has produced and organized the Great American Outdoor Show for the past five years.
“This (show) has turned from being a regional/local event to a national destination,” Jason Brown, NRA media relations manager, said on Thursday. “It’s the biggest consumer sports outdoor show in the world. We’re expecting around 200,000 people from across the country to attend. People from 48 U.S. states and Europe bought tickets for last year’s show. It’s become a staple in this area.”
The 2018 Great American Outdoor Show is presented by MyOutdoorTruckTV. Associate sponsors are Cabela’s and Ram Truck.
Although the show has grown over the years, Brown said becoming bigger isn’t necessarily organizers’ key objective. “Our goal is to bring back an amazing show here each year and bring back the same folks who enjoyed it before. We’re celebrating the outdoor lifestyle. Americans can come together here and share traditions,” Brown said.
The show’s popular Wall of Gun event returns this year, but with a new twist — the Wall of Guns Treasure Hunt Bingo Card. Players who receive a full row of stamps from sponsoring vendors are entered to win a bingo drawing for $1,000 cash or a Henry rifle. Participants also can try their luck at winning a choice from more than 60 firearms at the Wall of Guns. The event is sponsored by Henry Repeating Arms and runs each day of the show.
From Feb. 3 to Feb. 7, the high-flying DockDogs competitions return to the show’s large arena. The public is welcome to enter canine companions in up to three DockDog events. Spectators are welcome.
From Feb. 3 to Feb. 11, a 3D Bowhunter Challenge & Spot Shoot is sponsored by Weaknecht Archery and Victory Archery. Participants can vie for trophies and cash prizes by showing their skills in a 30-shot course. The new Spot Shoot is presented by Keystone State Games.
Also, more than 200 seminars and demonstrations focusing on hunting, fishing, cooking and self/home defense are available onsite from Feb. 3 to Feb. 11 with appearances by outdoor celebrities and experts. The 5,000-gallon Hawg Tank returns this year with a full lineup of seminars from world-renown anglers.
Family fun also is available every day of the show. Youngsters can try out the Kids Trout Pond, the NRA Range Experience, a rock climbing wall, and the NRA Air Gun Range. An Eagle Eddie Kids Zone celebrates 30 years of gun accident prevention with face painting, basketball and more. A Kids Casting Contests will be conducted on Feb. 3, 4, 10 and 11.
On Feb. 10, NRA Country presents Granger Smith and LoCash with special guests Nate Hosie and Earl Dibbles Jr. at the Large Arena. The family-friendly Friends of NRA Banquet takes place on Feb. 8 with chances to bid on and win firearms, merchandise and hunts.