IRS issues draft of revised Form W-4 for 2020

By Sally P. Schreiber, J.D.

On May 31, the IRS released a draft 2020 Form W-4, Employee’s Withholding Allowance Certificate, which has been extensively revised in response to feedback from the payroll and tax community to simplify the task for taxpayers to accurately calculate their income tax withholding.

The draft form implements changes made after the law known as the Tax Cuts and Jobs Act, P.L. 115-97, which made major revisions affecting taxpayer withholding. The new Form W-4 eliminates the use of withholding allowances, which were tied to the personal exemption amount.

“The primary goals of the new design are to provide simplicity, accuracy, and privacy for employees while minimizing burden for employers and payroll processors,” said IRS Commissioner Chuck Rettig.

The IRS is accepting comments on the draft form for 30 days and will then issue what it called a “near-final draft” of the form in July to give employers and payroll processors time to update their systems before the final 2020 form is released in November. It also plans to release instructions for employers for the form in the next few weeks and is seeking comments on those as well. The IRS also posted FAQs about the new draft intended to aid in reviewing it.

In a news release about the draft Form W-4, the IRS noted that the form is not for immediate use and that taxpayers should continue to use the current Form W-4 for 2019. The IRS also again encouraged taxpayers to do a “Paycheck Checkup” to ensure that they are having the right amount of tax withheld.

Sally P. Schreiber, J.D., (Sally.Schreiber@aicpa-cima.com) is a JofA senior editor.

SPONSORED REPORT

Scorecard preparation templates and tips

With Workiva, we've created a PowerPoint deck that helps you create your own scorecards -- quick reference reports used across organizations to update stakeholders on the performance of defined deliverables.

100th ANNIVERSARY

Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.