New W4 Form for 2020
To go into effect January 1, 2020, the IRS has released an updated version of Form W-4. This newly redesigned version 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.
One major change on this form is the exclusion of withholding allowances. Explained by the IRS, “Allowances are no longer used for the redesigned Form W-4 to increase transparency, simplicity, and accuracy. In the past, the value of a withholding allowance was tied to the amount of the personal exemption. Due to changes in law, currently you cannot claim personal exemptions or dependency exemptions.”
Employees that were hired prior to 2020 will have the option of completing the updated Form W-4 at any time to change their withholding amount, however filling out the 2020 version will only be required for those hired in 2020 and later.
Next steps:
- Read the IRS FAQs re: Form W-4 for 2020 – https://www.irs.gov/newsroom/faqs-on-the-draft-2020-form-w-4
- Share this FAQ link and the new form with your employees. The FAQ is not only for employers. It has a section to address common employee questions.
- Replace current version of Form W-4 with the updated version in HR onboarding paperwork – https://www.irs.gov/pub/irs-pdf/fw4.pdf
- Require all new hires and prior year hires (changes) to use the updated form beginning January 1, 2020