In the past, payroll managers depended largely on the number of personal exemptions claimed by an employee to determine family size, which helped them calculate how much federal income tax to withhold throughout the year. But under the new rules, personal exemptions were eliminated entirely, making it more difficult for payroll departments to determine accurate tax withholding for each worker.
“The new rules didn’t take into account family size in the same way that they did before,” said Sarah Austin, policy analyst at liberal think tank the Maine Center for Economic Policy.
The result was that a large number of workers were paying less than 100 percent of their actual federal income tax liability throughout the year, she said, which made the tax cut look bigger than it really was. Some critics have claimed that this was by design, but Austin said there is no hard evidence to support that allegation.