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New W-4 Requirements Effective for 2020

 

Probably the biggest question regarding the new For W-4 for both companies and employees is "Does everyone have to fill out the new form?" The answer, according to the August guidance, is no. The IRS says, "Employees who have submitted Form W-4 in any year before 2020 are not required to submit a new form merely because of the redesign. Employers will continue to compute withholding based on the information from the employee's most recently submitted Form W-4."

What must you do as an employer? 

  1. Beginning January 1, 2020, insure that the required employees provide the completed 2020 Form W-4.

Who must complete the 2020 Form W-4?

New hires to be first paid beginning 1/1/20

Any employee that wishes to update their withholding

Any employee that claimed exempt from withholding tax in the prior year

2. Insure that your payroll system is updated and ready to comply with the new Form W-4

If you use Sage 50 as your payroll system, they require that you update to the 2020 software in order to access the 2020 Form W-4 in the payroll system.

If you use QuickBooks for payroll processing, Intuit has incorporated the new 2020 W-4 as an option in the Employee Taxes setup.  You must run an update to the Payroll Tax Tables to have access to the new form input.

IRS has provided the following resources for payroll withholding that is done manually or using a proprietary system:

The Frequently Asked Questions provided by IRS will be helpful in implementing the new 2020 Form W-4 by you, as an employer, and for questions your employees have when completing the new form.

 
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Coulter & Justus, P.C.
Coulter & Justus, PC
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9717 Cogdill Rd, Suite 201
Knoxville, TN 37932
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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