FORM W-4 2020

IT’S HERE! One of the hottest topics of 2020, The IRS has released the final W-4 for 2020.

The new form presents a marked difference from the way employees used to convey their withholdings. Instead of requesting adjustments to withholding using allowances, now the employee will provide employers with amounts to increase or decrease the amounts of wages subject to Income Tax Withholding.

These are the key points employers should note, the IRS said when the final version of the 2020 Form W-4 was released:

  • All new employees hired as of Jan. 1, 2020, must complete the new form.

  • Current employees are not required to complete a new form, but if they want to make adjustments,  they should use the new form.

  • Any adjustments made after Jan. 1, 2020, must be made using the new form.

  • Employers can still compute withholding based on information from employees’ most recently submitted Form W-4 if employees choose not to adjust their withholding using the revised form.

  • Ensure that your on-boarding and payroll systems are aligned to take in the information based on the new from

  • The IRS will provide instructions in the 2020 Publication 15-T, Federal Income Tax Withholding Methods, on the additional amounts that should be added to wages to determine withholding for nonresident aliens. Additionally, nonresident alien employees should continue to follow the special instructions in Notice 1392 when completing their Forms W-4.

Alice Jacobsohn, senior manager of government relations for the American Payroll Association (APA), a payroll industry trade group, noted that:

  • If a newly hired employee in 2020 does not complete a 2020 Form W-4, the employer instructions state that employers should treat them as a single filer with no other adjustments.

  • If an employee only completes steps 1 and 5, the employer is instructed to withhold based on the identified withholding status with no other adjustments.

As before, employees’ tax liability is based on combined income from all sources, including second jobs, investment income, and a spouse’s earnings. “Additional tax may be due at the time of filing if withholding is not sufficient to meet tax obligations,” Barber explained. So employees may want to make adjustments to reflect these additional incomes, deductions, and credits.

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