New Jersey Withholding Tax Change

The New Jersey Department of Treasury released revised withholding tables, effective January 1, 2009. These tables will increase the withholding tax calculations for employees with incomes of $400,000 or more. This change is based on legislation that was signed into law on June 29, 2009 regarding the current state budget.  The agency is requesting that employers begin using the revised Withholding Formulas as soon as possible, but no later than October 1^st 2009. Additional information can be found at the Agency’s website and the new withholding tables can be viewed here.

QuickPayroll is releasing Payroll Update 20919 to comply with these changes.

Frequently Asked Questions

How do I know if I'm affected?

You may be affected if:

• You currently withhold income taxes from employees; and
• You make withholding tax payments in the State of New Jersey: or
• If you currently have a valid New Jersey Federal Employer Identification No. and Suffix No.

When are the revised withholding tables of withholding effective?

These changes are effective for taxable years beginning on or after January 1, 2009 and are to be implemented

no later than October 1^st, 2009.

When will the updated withholding tables be available in QuickPayroll?

QuickPayroll will modify the Withholding Formulas in Payroll Update 20919, scheduled for release on August 13, 2009.

Do I have to adjust withholding taxes calculated before I install Payroll Update 20919?

You do not need to make any adjustments to withholding taxes that were calculated using the prior withholding tables. Since withholding tax calculations do not self adjust in QuickPayroll and the revised Withholding Formulas will increase the state withholding tax for wage earners that exceed the $400,000 age bracket, employers may want to ask their employee(s) if they want to adjust their withholding tax on future payroll checks.  If the employee(s) chooses to adjust their future withholding tax, they will need to complete a new state withholding NJ-W4 form.

What do I need to do?

You will need to download and install Payroll Update 20919 as soon as it is released so the correct amount of New Jersey withholding taxes are calculated and withheld from employee paychecks from that date forward.

For more information on how to download and install a Payroll Update, click on the Help menu, select User’s Guide from the drop down list, click on the Index tab, and then type “Updating” in first field.  Help is provided for both downloading and installing Payroll Updates.