As you probably heard the IRS totally revamped the W4 form for 2020. The new form is completely different from the decades we have been used to selecting single or married and number 1 to 7 to calculate a percentage for tax withholding.
The new form takes into account multiple jobs, dependent credits, and your projected annual earnings. If you don’t have dependents or a lot of itemized deductions – it’s simple as checking “single” and sign at the bottom. If you do have special circumstances you may need to consult your CPA or at least a YouTube video for some help navigating it.
Why Did They Make The Changes?
“Allowances are no longer used for the redesigned Form W-4. This change is meant to increase transparency, simplicity, and accuracy of the form. In the past, the value of a withholding allowance was tied to the amount of the personal exemption. Due to changes in law, currently you cannot claim personal exemptions or dependency exemptions.”
Do You Have to Get New W4s from your Employees?
No. Employees who have furnished Form W-4 in any year before 2020 are not required to furnish a new form merely because of the redesign. Employers will continue to compute withholding based on the information from the employee’s most recently furnished Form W-4.Link to FAQ https://www.irs.gov/newsroom/faqs-on-the-2020-form-w-4
Link to New W-4 Form https://www.irs.gov/pub/irs-pdf/fw4.pdf
Please send your payroll specialist the new W-4 for any new employees you set up for payroll this year. Of course we can always update existing W-4 rates with the new form if you or your employee would like to make the change. It is not required to send in new forms for employees who already had the old W-4 on file.
Please reach out to your specialist or myself anytime with questions. It is my pleasure to be a resource!