The IRS released a second draft of the 2020 Publication 15-T, Federal Income Tax Withholding Methods, dated August 13, 2019. The IRS said this draft and the second draft of the 2020 Form W-4, Employee’s Withholding Certificate (dated August 8, 2019), can be used to program payroll systems. The IRS stressed that the tables and other numbers in the draft are for testing only as the actual numbers for 2020 will not be released until later in the year.
In this second early release draft, the IRS did not change how to calculate withholding using the Percentage Method from the first early release draft in June. However, some line numbers have changed because the calculation for withholding using the Wage Bracket Method has been moved to separate worksheets.
The IRS did add instructions for employees to claim exempt from withholding and how employers should calculate withholding for nonresident alien employees.
Worksheet Changes
The IRS renamed Worksheet 1, Employer’s Withholding Worksheet for Percentage Method Tables for Automated Payroll Systems. There are four additional worksheets for calculating withholding using manual payroll systems. For both the Percentage Method and Wage Bracket Method there are two worksheets, one each for the 2020 Form W-4 and the other for forms completed before 2020.
The Final Versions
The final versions of the 2020 Form W-4 and Publication 15-T will not be posted until late fall. The IRS said “there will be no further substantive changes to the Percentage or Wage Bracket Method.”
APA’s Comments
APA’s Government Relations Task Force IRS Issues Subcommittee submitted comments on the draft 2020 Form W-4 and Publication 15-T. The IRS incorporated many of APA’s suggestions into the second draft. If you would like to join the subcommittee, indicate your interest by completing the Contact Us form on the APA website.
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