IRS announces a new W-4 for 2020
The IRS has recently released a draft copy of a brand new W-4 for 2020. What’s the goal for this new release? To “reduce the form’s complexity and increase the transparency and accuracy of the withholding system,” according to a recent press release. In short: taxpayers should not owe or be owed come tax time.
What is a W-4?
A W-4 (or Employee Withholding Allowance Certificate) is a government required form that is used to specify how many allowances an employee is claiming. In turn, an employer would use the form to determine how much money to withhold from an employee’s paycheck for federal income taxes. Once the employer gathers the withholdings, they submit them to the IRS along with the employee name and Social Security Number. The withholdings gathered count towards the employee’s annual income tax bill when they file in April.
Based on the draft, what changes can you expect on the new W-4?
- New Marital Status box
- Tax Credits
- Additional Incomes
- Building block approach to help calculate Personal Allowances
How will this affect me as an employer?
Beginning in 2020, all employees will be required to fill out the updated and redesigned W-4.
Employees who have filled out the W-4 in years prior to 2020 will not be required to submit a new document solely due to the new design. As an employer, you are responsible for continuing to withhold taxes from paychecks based on previously completed W-4s on file.
Note: The form is not for immediate use and taxpayers and employers should continue to use the current W-4 for 2019. If you have questions, refer to the IRS FAQs.
Have you thought about how you plan to collect the new W-4 form from employees in 2020? Use BerniePortal’s Onboarding feature to eliminate paperwork, maintain compliance, improve employee experience and save time.
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