The Internal Revenue Service (IRS) is making changes to the W-4 form in 2020. This form, which allows employers to calculate federal withholdings from employees’ pay, has been renamed the Employee’s Withholding Certificate beginning in January. The new form will have a five-step process for entering a person’s information, which the IRS hopes will add accuracy to the process.
The new W-4 will no longer have an exemption line. Instead, employees will be able to itemize their deductions on a worksheet and then enter the results on the form. Although boroughs do not file W-4s with the IRS, they should keep them on file for all current employees. The IRS suggests offering employees yearly opportunities to review their withholding allowances and change them if necessary.
The five-step approach is as follows:
1. Enter personal information
2. Account for multiple jobs
3. Claim dependents
4. Other adjustments (optional)
5. Sign and date