2020 - Form W-4 Updates
As part of the 2017 Tax Cut and Jobs Act, the Internal Revenue Service has been announcing updates to Form W-4, otherwise known as the Employee's Withholding Certificate. This form is used by employers to calculate the amount of federal taxes to withhold from an employee’s paycheck.
The IRS is encouraging all taxpayers to review their federal tax withholding information and update if necessary. Employees should review their income and marital status, as well as review their estimated deductions and tax credits to determine if the new Form W-4 is required. The tax tables have been revised which may result in decreased withholdings.
Employees hired before 2020 who do not want to change their withholding do not need to complete a new Form W-4; however, anyone who does wish to adjust their withholding after January 1, 2020, MUST provide their employer with the new Form W-4. Any employee hired on or after January 1, 2020, is required to complete the new Form W-4.
Most states have not announced their plans for any changes to state Form W-4. Blystone & Bailey, CPAs, PC will continue to monitor and provide updates when federal and state Form W-4s are finalized.