Recently the IRS released the official W-4 that will be used starting January 1, 2020. The new form “uses the same underlying information as the old design, but it replaces complicated worksheets with more straightforward questions that make accurate withholding easier for employees” (irs.gov 2019).
Here is a quick summary of the changes and who needs to fill out the new form:
- Due to recent changes in the law, individuals are no longer allowed to claim personal exemptions or dependency exemptions. As a result, the redesigned W-4 will no longer use withholding allowances.
- The new W-4 is now divided into 5 simple steps:
- Personal information
- Account for multiple jobs and jointly filing working spouses
- Claim dependents
- Other adjustments (other income not from jobs, deductions or extra withholding)
- Only steps 1 and 5 will be mandatory, while steps 2-4 are completed if they apply.
- Employees with an old W-4 on file prior to January 1, 2020 will not need to supply a new W-4.
- New employees or employees wishing to make changes to their withholding after January 1, 2020 will need to fill out the new 2020 Form W-4.
- After January 1, 2020, if an employee provides a form with only step 1 completed, then their withholding will be computed based on the employee’s filing status’s standard deduction and tax rates, with no other adjustments.
Should you like to view the new 2020 Form W-4 or need more clarification regarding this or any other HR matter, contact Sage Solutions Group at 734-855-7189 or visit us on the web at www.sagesolutionsgroup.com.
Sage offers a free HR audit to assess your current HR health, call now to schedule!