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