Changes are being made to the 2020 Form W-4 as a result of the December 2017 tax code overhaul (Pub. L. 115-97). A second draft of Publication 15-T, Federal Income Withholding Methods, has been made available to include withholding tables and nonresident alien employee instructions. The new publication completes the transition to dollar amounts from withholding allowances in federal tax-withholding calculations. Employers should stay well informed of these changes because any employees who need to complete a Form W-4 should complete the new form beginning in year 2020.
Employees filling out the 2020 Form W-4, Employee’s Withholding Certificate, no longer would be able to claim withholding allowances. Instead, employees need to provide whole dollar amounts to employers if they want more accurate withholding during the year. A revised version of the draft 2020 Form W-4 was released Aug. 8 by the IRS.
As described by the IRS, “the new Tax Withholding Estimator makes it easier to enter wages and withholding for each job held by the taxpayer and their spouse, as well as separately entering pensions and other sources of income. At the end of the process, the tool makes specific withholding recommendations for each job and each spouse and clearly explains what the taxpayer should do next.” The Tax Withholding Estimator link can be provided to employees to help them determine how to complete the new W-4 form.
RDA Systems will be making changes to the filing tab in Personnel Demographics and tax calculations to follow the requirements of the new publication and W-4 form. For further information regarding changes as a result of the tax overhaul, please visit https://www.irs.gov.
2019 Tax Forms and Supplies Notice: Order forms will be sent out to RDA clients in early September. Be on the lookout for an email.
4 thoughts on “Changes Ahead – 2020 Withholding Calculation and Form W-4”
How will this affect payrolls that are misc. with less gross salary than the selected federal flat amount requested to be deducted?
Hi Barbara, thank you for your question. At this time we can’t answer any specific programming related questions since the programs are not complete, however questions regarding tax status, employee pay and the changes regarding the tax laws and how they affect employment taxes should be directed to the IRS since they are the experts on these changes. You can call 1-800-829-1040 for tax questions regarding your personal income taxes and the 2017 tax law changes.
Hi Leah,
Will we be getting new program updates in January to reflect the changes?
Hi Sue, yes! New programs that will include the 2020 W-4 changes will be available end of December to early January. Keep a look out at the Product Announcements to notify customers about program release information.