The IRS issued a draft version of the 2019 Form W-4, Employee’s Withholding Allowance Certificate, and instructions for the form, in an attempt to further simplify the task of determining income tax withholding for individual taxpayers after the passage of P.L. 115-97, known as the Tax Cuts and Jobs Act of 2017 (TCJA). The TCJA eliminated personal exemptions, increased the standard deduction, increased the child tax credit, limited or discontinued certain deductions, and changed the tax rates and brackets. The 2018 Form W-4 and instructions were four pages, whereas the 2019 draft form, which is stamped with a June 5 issue date, is less than two pages.
The IRS cautioned that taxpayers should not rely on draft forms, instructions, and publications for filing. It added that it provided the draft form as a courtesy, and though it does not usually release draft forms until it has incorporated all changes, it anticipated that in this case the final form would have changes. Even if the final draft form does not change, the IRS will post a new draft this summer.
Most of the shortening of the draft 2019 Form W-4 and instructions and instructions is due to eliminating the “Personal Allowances Worksheet,” the “Deductions, Adjustments, and Additional Income Worksheet,” and the “Two-Earners/Multiple Jobs Worksheet” from the instructions. The form itself, due to the TCJA changes, no longer has a line to report the number of allowances the taxpayer is claiming.
However, the form has lines added for the optional reporting by the taxpayer of nonwage income not subject to withholding, itemized deductions and other deductions and credits, and wages of members of the taxpayer’s household that have lower-paying jobs. In the instructions, the IRS states that taxpayers who do not want to give their employer this additional information can use the withholding calculator on the IRS website and to consult IRS Publication 505, Tax Withholding and Estimated Tax, to calculate any tax credits and any additional amount they would like withheld from each paycheck.
— Sally P. Schreiber, J.D., (Sally.Schreiber@aicpa-cima.com) is a Tax Adviser senior editor.