The W4 is Changing in 2020. What do You Need to Know?

The IRS will publish the 2020 W4 late in 2019. The changes are significant and might be confusing to your employees. It is important to note that employers should not give advice or instruction on how to fill out tax forms. If employees have questions about how to fill out a W4, or how their choices will affect their taxes, Employers Council strongly advises you to direct them to a personal tax advisor. There are a few things you should know.

• The IRS states that the form has been redesigned to be less complicated, more transparent, and to align with recent tax law changes.
• The form itself will look a little different; due to changes in tax law, there are no longer any allowances.
• Employees hired before 2020 who already have a W4 are not required to fill out a new form unless they want to make changes to their tax withholding.
• In 2020, all new employees are required to use the new form. Any other form will be invalid. Employees who do not submit a W4, or who do not use the 2020 form, must be treated as a single filer with no other adjustments.
• You may ask all employees to complete a new W4 form, but you cannot require it.
• Employers will want to start working with their payroll providers to see if there have been any updates on how to enter the information from the form. The IRS will publish additional guidance on the payroll calculations needed based on the data fields on the new and old forms.

You can find a draft to read (not to use) here. You can find the IRS FAQ page for both employees and employers here. Finally, while it is not a good idea to give your employees advice on completing the form, you can direct them to the IRS withholding estimator here.