On December 5, 2019 the IRS released a revised 2020 Form W-4, re-titled “Employee’s Withholding Certificate”. The new form allows for more accurate withholding, greater privacy for employees and has been revised for easier completion.
2020 Form W-4 Changes
The 2020 Form W-4 is presented on a single full page followed by instructions, worksheets and tables. In place of withholding allowances, the new W-4 includes a five step process for declaring additional income.
Current employees are not required to complete a new form.
Any withholding adjustments made after January 1, 2020 must be made using the new form.
For employees who choose not to adjust their withholding using the revised form, employers can compute withholding based on information from the employee’s most recently submitted Form W-4.
If a newly hired employee in 2020 does not complete a 2020 Form W-4, the employer instructions state that employers should treat them as a single filer with no other adjustments.
How to Complete the New Form W-4
Employees must complete Step 1 with their personal information and Step 5 with their signature.
Steps 2, 3 and 4 are optional. Employees may want to complete these steps if they wish to provide withholding information that may have an impact on their tax liability.
Are all employees required to submit a new Form W-4? No. Current employees are not required to complete a new Form W-4. They may use the new form to make adjustments to their withholding. Only newly hired employees in 2020 and beyond are required to use the new form.
Can you use the old Form W-4 in 2020? No.
Are Employers required to have employees complete a new W-4 each year? No
Is there a computer program I can use to help me complete the new Form W-4? Yes. The IRS has provided a Tax Withholding Estimator for individuals that would like additional help completing the new form.
For more information, the IRS provides additional FAQs that may be helpful. If you have additional questions or require assistance in communicating these changes to your employees, contact one of our HR Advisors today to receive a sample instruction letter.