2020 Form W-4 has been revised

On May 31, the IRS released a draft 2020 Form W-4, Employee’s Withholding Allowance Certificate (available at www.irs.gov, which has been extensively revised in response to feedback from the payroll and tax community to simplify the task for taxpayers to accurately calculate their income tax withholding.

The draft form implements changes made by the law known as the Tax Cuts and Jobs Act, P.L. 115-97, which made major revisions affecting taxpayer withholding. The new Form W-4 eliminates the use of withholding allowances, which were tied to the personal exemption amount.

“The primary goals of the new design are to provide simplicity, accuracy, and privacy for employees while minimizing burden for employers and payroll processors,” said IRS Commissioner Chuck Rettig.

The IRS accepted comments on the draft form for 30 days (i.e., until June 30) and said it intended to issue a “near-final draft” of the form in July to give employers and payroll processors time to update their systems before the final form for 2020 is released in November. On June 7, the IRS released an early draft of new Publication 15-T, Federal Income Tax Withholding Methods, for 2020 (available here) and sought comments on that as well by July 8. The IRS also posted FAQs (available here) about the new draft form intended to aid in reviewing it.

In a news release about the draft Form W-4, the IRS noted that the form is not for immediate use and that taxpayers should continue to use the current Form W-4 for 2019. The IRS also again encouraged taxpayers to do a “Paycheck Checkup” (available here) to ensure that they are having the right amount of tax withheld.