The IRS has released a draft of the 2019 Form W-4, Employee’s Withholding Allowance Certificate, and a draft of the 2019 Instructions for Form W-4. The draft Form W-4 has been substantially revised to comply with the Tax Cuts and Jobs Act (TCJA). Both the way withholding amounts will be calculated and the form that employees will complete will be drastically different beginning in 2019. Employees will be strongly encouraged, but not required, to file a new Form W-4 for 2019.
Draft Form W-4
Filing status: Line 3 is used to indicate the employee’s tax filing status. The draft 2019 Form W-4 has checkboxes to indicate that the filer is single or married filing separately, married filing jointly, or head of household. Instead of claiming allowances based on filing status using a separate worksheet, the number of allowances will be calculated automatically based on the filing status that is checked – 2 if single or married filing separately, and 3 if married filing jointly or head of household.
Lines 5-8. Lines 5-8 are new and are optional, but completing them will provide more accurate withholding information. Line 5 is for nonwage income not subject to withholding; Line 6 is for itemized and other deductions (other than the standard deduction); Line 7 is for applicable tax credits; and Line 8 is for the total pay of lower paying jobs and is only used when employees have more than one job or are married filing jointly and both spouses work. Completing these lines requires information that employees may not want to share. Instead, employees may use the IRS Withholding Calculator or IRS Publication 505, Tax Withholding and Estimated Tax, to figure amounts to include on Line 7 (tax credits) or Line 9 (additional withholding per paycheck).
Draft Instructions for Calculating Withholding
Withholding when the 2019 Form W-4 has no entries on Lines 5-10 will be the amount from the 2019 withholding tables in IRS Publication 15, (Circular E), Employer’s Tax Guide, for the proper pay period with withholding allowances corresponding to the employee’s filing status. If amounts are reported on lines 5, 6, 7, 8, or 9, the employer will have to make additional withholding calculations.
Prior year Forms W-4. The instructions explain how employers should make prior year Form W-4 data conform to the new withholding method for 2019. The withholding tables and formulas are adjusted to take older Forms W-4 into account.
Learn About the New Form W-4 at APA’s Payroll Tax Forum
APA’s Payroll Tax Forum is a one-day seminar that is offered in 15 cities nationwide that will take place June 18-22. If you cannot attend in person, the four class segments also are offered online as webinars, both live and on demand. Additional information about the substantial revisions made to the draft Form W-4 and instructions has been added to the curriculum.