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Earlier this month the Treasury Department and IRS announced that they will be releasing a redesigned W-4 form in 2020. Several changes were made to the form with the goal of providing employees with a more simplified and transparent withholding system.
This redesigned form uses a building block approach that replaces the previous complicated worksheet with straightforward questions. While it still uses the same information as the old design, the new form uses a step-by-step approach to accommodate taxpayer needs.
Employees who have submitted a W-4 form before 2020 will not need to fill out and submit a new form. If you or your employees have questions about your withholdings and whether they are accurate, take a look at the IRS estimator.
Why redesign the W-4 form?
The new design works to reduce the form's complexity and increases the transparency and accuracy of the withholding system. While it uses the same information as the old design, it replaces complicated worksheets with simplified questions that make accurate withholding easier for employees.
What happened to withholding allowances?
Allowances are no longer used for the redesigned W-4 to increase transparency, simplicity, and accuracy. In the past, the value of a withholding allowance was tied to the amount of the personal exemption. Due to changes in law, currently you cannot claim personal exemptions or dependency exemptions.
Are all employees required to submit a new Form W-4?
No. Employees who have submitted W-4 forms in any year before 2020 are not required to submit a new form merely because of the redesign. Employers will continue to calculate employee withholdings based on the information from the employee's most recently submitted W-4 form.