New IRS Form W-4

Effective January 1, 2020 for all new employees

The final version of the Form W-4 was released by the IRS and will be required for new employees, and for all withholding adjustments, effective January 1, 2020

The updated form to better reflects the current tax code established under the Tax Cuts and Jobs Act of 2017. Key changes include the elimination of withholding allowances and the ability for taxpayers to have more tax withheld. (This addresses concerns for those who had to unexpectedly pay tax when filing in the years following the tax reform legislation). One of the most significant changes is that there are no withholding allowances. Allowances have been the basis for income withholding for many years, so employees may ask about how to adjust their withholding using the new form.

Click here for an Employers Guide to the New IRS W-4 Forms to help you answer questions about the revised Form W-4.

CLICK HERE FOR THE NEW IRS FORM W-4

CLICK HERE FOR THE IRS TAX ESTIMATOR

WHAT IS DIFFERENT ON THE NEW W-4?


The 2020 Form W-4 will have several new entries:

  • New marital status box for head of household,
  • Checkbox for optional higher withholding,
  • Full-year value of child, dependent, and other tax credits,
  • Full-year amount of other (non-wage) income,
  • Full-year amount of itemized deductions (over the standard deduction amount), and
    Per-payroll additional amount to withhold (unchanged).

With the exception of marital status, the other elements are optional, so employees could decide to only enter their marital status and sign the form, possibly deciding to check the “optional higher withholding” box if their spouse also works. Current employees will not be required to complete the 2020 Form W-4.However, if they want to adjust their withholding, they must use the 2020 Form W-4.

Who does this change effect?

  • All new employees hired as of January 1, 2020 must complete the new form.
  • Existing employees are not required to complete a new form but can choose to adjust their withholding based on the new form. Any adjustments made after January 1, 2020 must be made using the new form.

Employers, therefore, must be prepared to compute employees’ withholdings based on both the old and new versions of the Form W-4.

New W-4 Worksheet

IRS has provided a worksheet to guide taxpayers through the completion of the new form available at:

https://www.irs.gov/pub/irs-pdf/fw4.pdf