2020 New Form W-4

With the redesign of Form W-4 for this year, The Payroll Tax Knowledge Center wanted to highlight some key reminders to help you maintain compliance from the employer side and to be able to assist employees with general questions. For more FAQ’s regarding Form W-4, please visit the IRS site here.

When should employers start using the redesigned Form W-4?

January 1, 2020

What is the difference from Form W-4 2019 from Form W-4 2020?

The new Form W-4 no longer uses the concept of withholding allowances which was previously tied to the amount of an employee’s personal exemptions. With the new Form W-4, it takes into account multiple jobs, credits for the full year for children and other dependants. In addition, the new form takes into account other adjustments such as other full year income (not from jobs), and full year deductions over than standard deductions.

Similar to the previous form, employees can still indicate an extra withholding. This amount must be indicated on line 4(c) of the new Form W-4.

Are existing employees required to fill out a new Form W-4?

No. Existing employees are only required to complete the new Form W-4 if they are making adjustments to their withholding.

What do I do if an existing employee submits the 2019 Form W-4 instead of the 2020 Form W-4 to adjust their withholding for 2020?

Reject it and request that changes be submitted on the new form.

What do I do if a new hire or rehire for 2020 does not submit a Form W-4?

Per the IRS, any employee who fails to furnish a Form W-4 will be treated as a single filer with no other adjustments.

As an employer, all employees should have a Form W-4 on file to ensure that the correct federal income tax is being withheld from the employee’s pay.

I am getting questions from employees who wish to exempt from federal income withholding and them not seeing where to indicate that on the form. How do I guide them?

Per the redesign Form W-4, if an employee wishes to exempt from having federal income taxes withheld and providing they certify that they meet the criteria outline on the form, they may indicated “Exempt” on Form W-4 in the space below Step 4(c). Then, complete Steps 1(a), 1(b), and 5. The form also indicates that no other steps are needed. Please refer to the Form’s instructions here.

When does an employee “exemption” status expire?

February 16, 2021.