On December 4, the IRS released the 2020 Form W-4, Employee’s Withholding Certificate. The 2020 form is substantially different from prior year forms and has been revised to comply with the income tax withholding requirements in the Tax Cuts and Jobs Act. The form has few changes from the second draft of the 2020 Form W-4, which was released in August.
The IRS is also designing the new Publication 15-T, Federal Income Tax Withholding Methods, to allow employers to figure income tax withholding under the Percentage Method and Wage Bracket Method tables using both the new 2020 Form W-4 and prior year forms. Publication 15-T has not been finalized, but the IRS expects to release it in December.
The IRS said that employees will not be required to complete a new Form W-4. However, employees hired in 2020 or who previously completed a 2019 or earlier form and want to make a change in 2020 must use the 2020 Form W-4.
APA Resources
For information about the changes to the 2020 Form W-4, see the December issue of Payroll Currently.
APA will present a two-part webinar series Avoid 2020 Form W-4 Anxiety and Disruption of Your Payroll Department to help you prepare. Part 1 of the webinar, The Final 2020 Form W-4 Is Here. No Allowances, No Problem, will be presented on Thursday, December 12 from 1:00-2:30 p.m. ET. Part 2 of the webinar, What Is Publication 15-T and How Do I Use It?, will be presented on Thursday, December 19 from 1:00-2:30 p.m. ET.
APA has added a new 2020 Form W-4 Compliance Hot Topic on its website that includes a sample letter employers can give to employees explaining the new form.
To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out Payroll Source Plus!
Jyme Mariani, Esq., is Managing Editor of Payroll Currently and Payroll Information Resources for the APA.