New 2020 W-4 Form

“I’ve heard there is a new W-4 form but want to know how to explain it to my employees. Can you help?” 

Your HR Survival Tip

It’s very important to remember the 2020 W-4 must be used after 1/1/2020. You do not need current employees to use it unless they want to make a change in their tax deductions. However, all employees hired after 1/1/2020 must use this new form.

Simply, the employee must complete Step 1 and Step 5. The other steps are only completed if the employee meets certain criteria.

  • Step 1:  The employee adds their personal information. If you don’t get a W-4 from the employee by the time you need to process payroll, you default to “single” in (c).
  • Step 2:  If the employee has multiple jobs or has a spouse with a job, they’ll need to complete this step. If the employee wants to maintain their financial privacy or asks for help from you, the safest thing is to direct them to the online calculator in (a) (https://www.irs.gov/individuals/tax-withholding-estimator). Using the online calculator will also provide the employee with the most accurate assessment of their situation and give them the information they need to complete the form.
  • Step 3:  The employee enters the information requested about dependents.
  • Step 4:  If the employee receives income from somewhere other than jobs, knows they won’t be claiming the standard deduction when they file their annual taxes, or want to have more taxes deducted from each check, they enter that information here.
  • Step 5:  This is the final step and if the employee doesn’t complete this section, the whole form is invalid. If this happens, it’s as if you didn’t get a W-4 from them.

Please keep in mind that you can explain to the employee what each box requires, but don’t do their math or offer suggestions. That’s a liability risk you don’t want.

Check the payroll processor you’re using and make sure they have updated their software to handle the new W-4. Their old software doesn’t have the same W-4 boxes to enter information so you’ll be unable to add a new employee into old software. Check out your payroll software before you actually need it.

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