The IRS released the long-awaited final version of the Employee’s Withholding Certificate, the form formerly known as a W-4. This form, while being a bit more cumbersome for the employers, should make the employee’s calculation of federal tax easier. Here are the key points all employers should make note of for the new form:
- All employees hired as of January 1, 2020, must complete the new form.
- Current employees are not required to complete a new form but may choose to adjust their withholdings based on the new form.
- Any adjustments made after January 1, 2020, must be made using the new form.
- Employers can still compute withholding based on information from the employee’s most recently submitted form W-4 if employees choose not to adjust their withholding using the revised form.
The IRS updated the W-4 to reflect tax codes changes ushered in by the Tax Cuts and Job Act. The intent is to replace the more complicated worksheets that employees had been completing with more straightforward questions and calculations.