The W-4, or Employee’s Withholding Allowance Certificate, has gone through several revisions since the Tax Cut and Jobs Act was mandated into law in December 2017. The 2020 W-4 drafts, however, are significantly different from the 2019 version of the form. After receiving input from the human resources, tax, and payroll communities, The Internal Revenue Service (IRS) and the Treasury Department issued the first 2020 W-4 draft on May 31 and then a second draft of the form on August 8.
According to the IRS, the recent drafts reduce the form’s complexity from previous versions and increase “the transparency and accuracy of the withholding system.” The draft design replaces complicated worksheets with more straightforward questions, in hopes of making it easier for taxpayers to fill out.
Personal allowances are no longer on the form. Instead, similar information is collected via Step 2: Multiple Jobs or Spouse Works and Step 3: Claim Dependents. The proposed form does retain the multiple jobs worksheet and tables as well as the deductions worksheet, though the number of steps in each section has been reduced.
Employers should continue to use the current 2019 W-4 through the end of the year. The final 2020 form will be released in the fall and should be used for new employees, and employees with withholding changes, starting January 1, 2020.
The IRS will accept comments on this latest draft through September 9. Comments are accepted via email: WI.W4.Comments@IRS.gov.