Want to Read More? To continue reading this article, please Log in or Register Now

How to Use the Wage Bracket Withholding Tables With Forms W-4 From 2020 or Later

Author: Alice Gilman

An employer must withhold federal income taxes from an employee's pay every pay period. The IRS provides several methods an employer can use to fulfill this duty. The wage bracket table method may be used by an employer that does not use an automated payroll system. The wage bracket tables are issued before a calendar year ends, to be used by an employer in the following year. The IRS publishes the wage-bracket tables in IRS Publication 15-T, Federal Income Tax Withholding Methods.

Due to the new version of IRS Form W-4, as of January 1, 2020, there are two different sets of wage bracket tables and worksheets:

  • Worksheet 2, Employer's Withholding Worksheet for Wage Bracket Method Tables for Manual Payroll Systems With Forms W-4 From 2020 or Later; and
  • Worksheet 3, Employer's Withholding Worksheet for Wage Bracket Method Tables for Manual Payroll Systems With Forms W-4 From 2019 or Earlier.

This How To explains how to use the wage bracket tables in conjunction with Worksheet 2 to determine withholding from the pay of an employee who submits a new Form W-4 on or after January 1, 2020. For information on how to use the tables in conjunction with Worksheet 3, see How to Use the Wage Bracket Withholding Tables With Pre-2020 Forms W-4.