How-To Video and Detailed Steps to Complete New 2020 Form W-4

On December 5, 2019, the Internal Revenue Service released the final version of the new 2020 Form W-4. 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 should continue to compute withholding based on the information from the employee’s most recently submitted Form W-4.

Employees complete the new 2020 Form W-4 so that their employers can withhold the correct amount of federal tax from their paycheck. A significant change for the 2020 form is that it does not have withholding allowances because employees may no longer claim personal exemptions or dependency exemptions. Previously, the value of a withholding allowance was tied to the amount of the personal exemption.

Here is a simple video on how to complete the new 2020 form W-4.

How to complete new 2020 Form W-4

The new 2020 form W-2 is divided into five steps and employees will provide information for the steps that apply to them (steps 2-4 may not).

Step 1: Enter personal information (including marital status).
Step 2: Account for multiple jobs (employee), or whether the employee’s spouse works. This step is completed if the employee holds more than one job at a time or is married filing jointly and their spouse also works. The correct amount of withholding depends on income earned from all jobs.

Steps 3 and 4: Claim dependents and other adjustments (specifically, other income that is not from jobs, deductions, and extra withholding). Steps 3 – 4 are completed on Form W-4 for only one job, and these steps are left blank for the other jobs. Withholding is most accurate if an employee completes Steps 3 – 4(b) on the Form W-4 for the highest paying job.
Step 5: Employee signature and date.

Publication 15-T (still in draft form) assists employers in determining the amount of federal income tax to withhold from their employees’ wages.

ERG Payroll & HR can guide you through the new 2020 form W-4 and can answer any questions that you may have. Contact our HR Guides today. 

If you did not watch the video above, here is the link.

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