The New W-4: Why and What’s Changed

By Persefini Quintero, SHRM-CP

April 3, 2020

If you haven’t already heard, the IRS has released a revised W-4 that looks and feels much different than before. While the revised form may look intimidating you can rest assured that the new look ensures more accuracy in reporting, provides increased assuredness of privacy, and is generally simpler to complete. The release was long-awaited, and the new W-4 is required to be used for all new employees effective January 1, 2020.

Key changes to the revised form:

  • There are 5 steps to complete, with only steps 1 and 5 being required for individuals who are unmarried, have no dependents, and no additional sources of income.
  • Employees have the option to make adjustments in step 4 without revealing additional information to the employer.
  • Withholding allowances are excluded, which were tied to the personal exemption amount.

The form, now retitled Employee’s Withholding Certificate, also comes with worksheets, tables, and this online estimator to assist employees. Although the new format is intended to be more straightforward and easier to use, the additional resources (in particular the online estimator) allow an employee to determine withholdings in step 4 without indicating to the employer any information regarding additional income. Completing the form requires 5 steps as follows:

Step 1: Enter personal information such as name, home address, social security number, and filing status.

Step 2: Complete information regarding multiple jobs or spouse’s employment, if any. You can use the online estimator or worksheets to determine withholding amounts to enter in Step 4(c) OR check the box in 2(c) if the individual works only 1 additional job. This step should be skipped if not applicable.

Step 3: Enter information regarding dependents. Follow calculation instructions in this step to determine the total for all dependents. This step should be skipped if not applicable.

Step 4: Enter any additional income or deductions that should be considered in lines 4(a) and 4(b), respectively. Any additional withholdings desired may be annotated in 4(c), as determined by use of the worksheets or the online estimator. This step should be skipped if not applicable.

Step 5: Sign and date.

The IRS has also confirmed that not all employees must complete the form, only those that have been hired after the start of the new year. Employers have been instructed to continue computing withholdings based on the old form on file, and only require employees hired before 2020 to complete the new W-4 if they wish to make changes. The FAQ page on the IRS website provides further insight to the revised form, for both employees and employers.

You can click here to download the new form with its accompanying worksheets and tables and begin using immediately.

You can count on us to assist you with any questions you might have, or if you require further assistance in navigating these changes.