Since the Tax Cuts and Jobs Act became law December 22, 2017, Ball State University has diligently examined how the law affects our business practices. We want to explain the changes that will occur.
While we must begin to implement these changes to achieve compliance, the IRS is still developing interpretations of the law. That means we may be required to make further changes.
As of now, we know of two changes that may affect some or all of our employees.
- New federal tax withholding tables
- On January 9, 2018, the IRS released updated income tax withholding tables for 2018 reflecting changes made by the new law.
- These tables have been loaded into Ball State's payroll system and will be used starting with the January monthly payroll and the February 2 biweekly payroll.
- Pretax payroll deduction for parking permits
- The new law changes how an employee pays for a parking permit, which is now done on a pretax basis. Beginning with the January 2018 monthly payroll, the payroll deduction for a parking pass will be processed on an after-tax basis.
- Payroll will continue to offer payroll deduction for parking passes.
If you have any questions about these changes, please contact Payroll and Employee Benefits at 285-8461.
As a reminder, University employees cannot give tax advice. If you have questions about how the new law affects your tax situation, please consult a tax advisor.
Frequently Asked Questions
Withholding tables changing
The new withholding tables are needed to reflect the changes in tax rates and tax brackets, increased standard deduction and repeal of personal exemptions that were included in the Tax Cuts and Jobs Act signed into law in late December, 2017.
The new tables will be utilized beginning with the January, 2018 monthly payroll (paid on 1/31/18) and the February bi-weekly payroll (paid on 2/2/18).
Not yet. The Internal Revenue Service designed these tables to work with the information we've already got on file for our employees. The IRS did release a new Form W-4 for 2018 that employees may use to adjust their withholding, as necessary.
It is always a good idea for employees to check their withholding to be sure it is meeting their individual situation. The IRS has released a withholding tax calculator on its website to help employees who wish to update their withholding in response to the new law or other changes in their personal circumstances in 2018. The IRS has answers to questions about its calculator on their website. It is each employee’s responsibility to check their withholding and determine if it is accurate for their personal situation. If you have tax questions, consult with a trusted tax professional.
No, it's your responsibility to check your withholding and determine if it's accurate for your personal situation. Payroll offices are responsible only for processing the Form W-4. It's important to remember people working in these offices do not know the rest of your personal financial situation, and they are not responsible for giving you tax advice. If you have tax questions, consult with a trusted tax professional.
Changes to the pre-tax parking plan
The new tax law overhauled which fringe benefits were deductible by employers for tax purposes. While Ball State is a tax exempt employer, if an item is not considered deductible by a for-profit entity, it becomes an item of taxable income for the University. Due to budget constraints, the University opted to discontinue the tax-free nature of this benefit as it will have a very small impact on employees but was a large budget hit for the University itself.
Yes, if you have signed up for a payroll deduction for your parking pass the remainder owed will continue to be deducted from your paycheck.
The IRS is posting information as it becomes available at IRS.gov.