APA has submitted comments on the early release draft of the 2020 Form W-4, Employee’s Withholding Allowance Certificate, and employer instructions under new draft Publication 15-T, Federal Income Tax Withholding Methods. The main focus of APA’s comments provided by the Government Relations Task Force IRS Issues Subcommittee focus on working toward clarity and consistency in the form and instructions.
APA members remain uncertain about employee reaction to the form. The IRS made a concerted effort to accommodate privacy issues and added steps to help employees understand the form. Yet, the agency is limited by the requirements in the Tax Cuts and Jobs Act.
As a general comment, APA recommended that the IRS use consistent language between the 2020 Form W-4, Publication 15-T, and the IRS’s Withholding Calculator. The Withholding Calculator also should match the Form W-4 with an explanation about where the calculated information should be placed on the form. The order of the worksheets should also be reversed to match the order on the form. The worksheets should be labeled to identify which one is for itemized deductions and which is for calculating income from multiple jobs.
While the specific instructions with the form ask employees to calculate other tax credits in step 3, the form is not labeled for these credits. APA recommended that the form include language to identify tax credits and asked for an additional line for employees to calculate the amount.
In addition, APA asked the IRS to add instructions explaining where income from independent contractors should be placed on the form, such as under step 2 for job income or step 4 for other income.
APA identified other areas where guidance is needed. These include the section on the form for employees claiming exempt status and withholding for nonresident aliens. APA also recommended that Line 4c on the form for withholding of additional amounts be highlighted and that the IRS add examples to Publication 15-T.
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