IRS to release new form W-4, Employee’s Withholding Certificate: Effective January 1, 2020
The IRS is updating the W-4 Form in 2020. The new design reduces the form’s complexity and increases the transparency and accuracy of the withholding system. While it uses the same underlying information as the old design, it replaces complicated worksheets with more straightforward questions that make accurate withholding easier for employees.
Highlights of the Redesigned 2020 W-4 Form:
Employees will no longer be able to request adjustments to their Federal withholding using withholding allowances. Instead employees will provide employers with amounts to increase or reduce taxes. In summary, withholding allowances, personal exemptions, and dependency exemptions will be eliminated from the W-4 form.
All new employees, hired on or after January 1, 2020 must use the redesigned 2020 W-4 form. Employees hired prior to 2020 are not required to complete a new W-4. Employers will continue to compute withholding based on the information from the employee’s most recently submitted Form W-4. However, if an employee hired prior to 2020 wishes to adjust their withholding due to a change in personal or financial status, they must use the redesigned 2020 W-4 form.
The only required steps on the redesigned 2020 W-4 are Step 1 which contains personal information (i.e. employee name and filing status) and Step 5 with a dated signature.
Employees will complete steps 2, 3, and/or 4 only if relevant to their personal situation. Steps 2, 3, and 4 show adjustments that will affect withholding calculations
For further information, please see the following resources:
IRS W-4 main page: www.irs.gov/forms-pubs/about-form-w-4
IRS W-4 FAQs: www.irs.gov/newsroom/faqs-on-the-draft-2020-form-w-4
IRS employee Tax Withholding Estimator: www.irs.gov/individuals/tax-withholding-estimator