The IRS has created a new Payroll Form W-4 for 2020. Newly hired employees in 2020 or any employees hired prior to 2020 who wish to adjust their withholdings in 2020 must use the redesigned form.
This new design reduces the complexity of the process and improves the withholding system’s clarity and reliability. In the past, the value of a withholding allowance was tied to the amount of the personal exemption. Due to changes in law, currently you cannot claim personal exemptions or dependency exemptions. Allowances are no longer used for the redesigned Form W-4, therefore you cannot complete the old W-4 Form.
Key Points to Remember:
- New Form Name “Employee’s Withholding Certification.”
- No longer uses allowances which have been tied to the amount of personal exemptions.
- Form is now divided into 5 steps. Steps 1 and 5 are required. Steps 2-4 are optional.
- There are 5 worksheets in Publication 15-T (Federal Income Tax Withholding Methods).
- Only newly hired employees in 2020 or any employees hired prior to 2020 who wish to adjust their withholdings in 2020 must use the redesigned form.