Comply With IRS Form W-4: New Task Added

The Internal Revenue Service (IRS) completely redesigned and renamed Form W-4 starting with calendar year 2020 to comply with changes made by the 2017 federal tax reform law. Employers use this important form to calculate the amount of income tax to withhold from each employee's pay.

On previous versions of the form (i.e., 2019 and earlier years), an employee's income tax withholding was determined by the number of withholding allowances the employee indicated on the form and the employee's tax (or marital) status. However, unlike previous versions, the new form includes five steps and an employee's income tax withholding is determined based on the employee's tax status and adjustments (allowances have been eliminated).

Because the changes to the form are so extensive, an employer must know which employees to whom it must provide the new form, how those employees should complete the form, and how to use the information provided by each employee on their respective forms to determine proper income tax withholding.

To help employers comply with both the new version of Form W-4 (starting in 2020), and the previous version of the form (i.e., 2019 or earlier versions), XpertHR has added a new payroll Task - Comply With IRS Form W-4 - which includes the following resources:

• How to Use Form W-4 to Withhold Income Taxes From an Employee's Pay;
• How to Handle IRS Lock-In Letters;
• Inform New Employees About the New Form W-4 Letter;
• Inform Current Employees About the New Form W-4 Letter;
• IRS Form W-4;
• IRS Publication 15-T, Federal Income Tax Withholding Methods;
• IRS Publication 15, Circular E, Employer's Tax Guide;
• Withholding Taxes: Federal;
• What documents should an employer obtain from a new employee?; and
• How long must an employer keep an employee's Form W-4?.

Additional resources will be added to the Task once the IRS issues the final withholding tables for 2020 and the final version of Publication 15-T.