By Trüpp’s Shared Services Team.
As we mentioned in our recent article, ALERT: Form W-4 updated again for 2020, the IRS released a new version of the 2020 Form W-4 for January 1, 2020. It was designed to simplify the process of setting up withholdings for both employees and employers and to improve accuracy.
Everyone who is employed has filled out a Form W-4, but many employees who have not had significant life changes, like getting married or having kids, have probably not filled out a W-4 in a LONG time. We recommend that employees review withholdings every year, especially this year, with a new version of the Federal W-4 being released. Only newly hired employees in 2020 are required to fill out the redesigned W-4, but existing employees can revise their tax withholdings at any time.
Below is a quick overview of what you, as an employer, need to know.
1. The name of this form has been changed.
Historically, Form W-4‘s title was “Employee‘s Withholding Allowance Certificate.” The 2020 Form W-4 no longer calculates “allowances,” so the title has been shortened to “Employee’s Withholding Certificate.”
2. New employees are required to complete the new form.
Employees are NOT required to fill out a new 2020 Form W-4. The previous W-4 will remain in effect until a new W-4 is submitted. All newly hired employees and those wanting to change their withholding must submit a new Federal Form W-4 and in the State of Oregon a new Oregon W-4. In Oregon, the Federal W-4 can no longer be used to enter the Oregon withholding amounts into the system.
3. Only some of the sections are required.
The only required sections on the new Form W-4 are Sections 1 and 5. Section 1 contains the employee’s personal information and filing status, and Section 5 is where the employee signs the form. If the employee does not complete Sections 2-4, the employer can skip these fields in the system.
4. IRS tools and links.
The IRS suggests all employees use the tax withholding estimator to calculate their 2020 W-4.
The IRS has posted helpful information on their website