The IRS has issued a new Form W-4 for 2020. All employers will be required to use this form for new employees hired as of January 1, 2020.
The 2019 Form W-4 underwent two previous updates, one in May and one in August, to incorporate the changes that came with the Tax Cuts and Jobs Act (TCJA). Those changes included suspension of personal exemptions and increasing the standard deduction, but previous versions of Form W-4 still included the withholding allowance based on the personal exemption amount. As such, some taxpayers were over-withheld and some under-withheld.
Current employees are permitted to submit a new Form W-4 after the first of the year, especially if they wish to adjust their withholding amounts. If current employees do not submit the new 2020 Form W-4, employers are required to base withholdings on the data provided on the 2019 version of the form so it would serve everyone best to make sure all employees complete a new Form W-4 in the New Year.
Learn more about the new Form W-4 in this FAQ guide provided by the IRS.
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