The IRS just released the new 2020 Federal W-4 Form on December 5, 2019!
What’s the Deal?
“The primary goals of the new design are to provide simplicity, accuracy and privacy for employees while minimizing burden for employers and payroll processors,” IRS Commissioner Charles Rettig said.
So, why all the changes to the W-4? The IRS updated the W-4 form to reflect tax code changes ushered in by the Tax Cuts and Jobs Act, which took effect in 2018.
The 2020 W-4 is a one-page layout, followed by instructions, worksheets, and tables. In place of withholding allowances, the new W-4 includes a process with five possible steps for declaring additional income.
The IRS explained: The only two steps required for all employees are Step 1, where they enter personal information such as their name and filing status, and Step 5, where they sign the form.
Most single people with 1 job will simply complete Step 1 and Step 5, to complete the new W-4. If Steps 2, 3 or 4 apply to employees and they choose to provide that information, their withholding will more accurately match their tax liability.
Addresses Privacy Concerns
On the new 2020 Federal W-4 Form, employees will be able to discreetly specify if they want to have more tax withheld without having to share the details with their employer. For instance, if they are not comfortable sharing that they have a second job, employees will not have to disclose that information.
Efficient Hire is Ready!
Efficient Hire will release the new version of the W-4 for all customers, ready to use on January 1, 2020.
During the Onboarding process, employees will be able to breeze through completing the W-4. Since only Step 1 and Step 5 are required, Efficient Hire uses the personal information already collected to complete the Form.
Employees will eSign the form using their Personal Pin when signing all other Onboarding documents.
What if my employees need more time to complete the W-4?
Employees may need more time to calculate their withholding amount based on tax information. Employees can complete Step 1 and Step 5, in addition to all other Onboarding requirements, and then return to their self- service portal and submit any changes they may need to make to their W-4 at a later time.
What do my employees need to know about the W-4?
To make it easier for you to inform your employees about the new form, we’ve provided a sample communication that you can modify and to send your employees. The letter gives an explanation of why the form has changed, recommends that employees perform a paycheck checkup using the IRS’s Tax Withholding Estimator, and basic information about the new steps employees will take to complete the form.
Let us know how we can help!