The IRS has released changes to the Form W-4 for 2020.
The finalized revisions of the Form W-4 will change the way employees withhold their federal income taxes.
All employees must complete Form W-4 to withhold the correct federal income tax from their pay. While the form has had many updates over the years, the 2020 W-4 will include significant changes.
There are a few things employees should know.
The new W-4 uses a lot of the same info as the familiar one, but with more straightforward questions and fewer steps to make tax withholding easier. You won’t find withholding allowances on the 2020 Form W-4. Instead, lines for dollar amounts will be used to calculate withholdings to keep the form simple and accurate.
Starting January 1, 2020, employees making changes to their tax withholding must use the new Form W-4. The IRS will not require employees who were hired prior to January 1, 2020, to complete a new W-4, unless they choose to change their withholdings after that date.
The IRS tax withholding estimator is an excellent tool for ensuring you have the right amount of income tax withheld. The form also includes an optional worksheet to help calculate dollar amounts. While we cannot provide tax advice, you can always reach out to us at Nextep to help you make sense of the shift in tax withholding.
Have questions about the new W-4? We’re here to help! Contact us online, by email, or at 888-811-5150.