Form W-4, retitled Employee’s Withholding Certificate, has undergone rounds of significant revisions since updates to the tax codes were announced by the Tax Cuts and Jobs Act in 2017 and implemented last year. The final version, designed to make accurate income-tax withholding easy for employees starting in 2020, was released on December 5, 2019, by the IRS.
Unlike the 2019 Form W-4, the revised form excludes withholding allowances and replaces complicated instructions with more straightforward questions. It consists of five steps, including entering personal information, indicating multiple jobs or if their spouse works, claiming dependents, declaring other withholding adjustments, and signing the form. The only two required steps are one and five. Other key elements employers should note about the 2020 Form W-4:
- All new employees hired as of January 1, 2020, must complete the newly finalized form.
- If any newly hired employees do not complete a 2020 Form W-4, employers should treat them as a single filer with no other adjustments.
- Current employees can choose to adjust their withholding and complete a new form but aren’t required to.
- For employees choosing not to complete a new form, employers can still compute withholding based on information from their employees’ most recently submitted Form W-4.
- Adjustments to any employees’ withholding beginning January 1, 2020, must be done with the new form.
- If employees only complete step one and five (entering personal information and signing), employers should withhold based on the identified withholding status 1(c) with no other adjustments.
For more information on the revised form, visit the About Form W-4 page from the IRS.