For the first time in many years the IRS has significantly revamped the Federal W-4 form for 2020. This new form will be required to be completed by all new employees beginning on January 1, 2020. Any existing employees who wish to make changes to their federal tax withholding after January 1st will also need to use the new version. Employers can ask, but cannot require, all existing employees to submit a new version of the W-4 form. However, if an employee hired before January 1, 2020 does not complete a 2020 W-4 employers must use the last completed W-4 to calculate appropriate federal withholding for the employee.
The biggest change is that employees no longer will indicate a number of allowances to claim to determine their tax withholding and replaces that with more straightforward questions that employees are more likely to understand how to complete.
The new form is one page and consists of five parts. Employees are required to complete Section 1 with basic information and their withholding status and Section 5 with their signature. Sections 2, 3, and 4 are optional sections that can be completed to change the withholding amounts for the employee. There are instructions, tables, and worksheets available for the employee to use to decide the best way to complete Sections 2, 3, and 4 when applicable.