After years of talking about it, the IRS has officially overhauled the Form W-4 for 2020. The redesign reflects changes to the federal tax code from the 2017 Tax Cuts and Jobs Act.
The update, the IRS said, “reduces the form’s complexity and increases the transparency and accuracy of the withholding system.”
While it uses the same underlying information as the old design, it replaces complicated worksheets with more straightforward questions.
Withholding allowances are no longer used for the redesigned Form W-4. In the past, the value of a withholding allowance was tied to the amount of the personal exemption. Due to changes in law, employees cannot claim personal exemptions or dependency exemptions.
The new W-4 form is required for employees who receive their first check in 2020 and employees who want to change something on their Form W-4. If employees who joined their employer before 2020 opt to not complete a new W-4 to reflect a change, withholding will continue based on a valid form previously furnished.
The IRS has launched an online assistant to help employers. Use the assistant if you typically use Publication 15-T to determine your employees’ income tax withholding.
For more information, visit the frequently asked questions page at FarmEquip.org/newW4.
Source: KCoe Isom