Effective January 1, 2020 a new Federal W-4, Employee’s Withholding Allowance Certificate, is required.
The form has new inputs for calculating federal income tax withholding and no longer allows employees to claim any number of personal or dependent allowances.
The updated Form and associated withholding tables were redesigned due to the 2017 Tax Cuts and Jobs Act mandates. Changes to the form are intended to increase the transparency and accuracy of employee withholding by taking into account spousal income, multiple jobs, and non-employee income (investments, rental income, retirement income, etc.).
The IRS is not requiring all employees to complete the revised Form and has designed the withholding tables so that they will work with both the new and prior year forms.
Who will be required to fill out the new form?
- Employees hired January 1, 2020 or after
- Any Employee who makes changes to their withholding elections at any time in 2020 or later
- Any Employee who has never previously provided a Federal Form W-4
Existing Employees withholding will continue based on their previously submitted W-4.