The IRS has been promising a new version of Form W-4, Employee’s Withholding Certificate, for some months, and it recently published it, with a brief announcement in its e-News service. The form is very similar to a draft version published earlier in 2019. Although the IRS has not yet published extensive new guidance, it did outline the changes in a FAQ list. Keep reading in order to see what you should know about the new W-4.
At that time, the IRS noted, “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.”
According to the IRS, a few of the visual changes that were made in the last draft shared include:
- It is now a full page.
- There are no withholding allowances (which is why the title of the form changed to “Employee’s Withholding Certificate”).
- Steps 1 through 5 to guide employees through the form.
- Instructions, worksheets, and tables follow the first page.
Probably the biggest question for both companies and employees is “Does everyone have to fill out the new form?” The answer, according to the August guidance, is no. The IRS says, “Employees who have submitted Form W-4 in any year before 2020 are not required to submit a new form merely because of the redesign. Employers will continue to compute withholding based on the information from the employee’s most recently submitted Form W-4.”
Pay special attention to the instructions on the Multiple Jobs Worksheet.
- If you have multiple jobs or you’re married filling jointly and you and your spouse each have one job be sure to complete the multiple jobs worksheet ( page 3 and 4).
Form W-4 Resources
We’ll keep you in the loop as the IRS provides additional guidance. Be sure to read, read, and read to better understand the W-4. The FAQs are a wonderful resource to better understand the goals of the new redesign. Be sure you are using the latest Atlantic Payroll Partners New Hire packet as it includes the latest W-4.
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