Going into the 2020 New Year you will see changes to more than just resolutions. The 2020 Form W-4, Employee’s Withholding Certificate, is quite different from the previous versions. This new form comes from a federal tax law change that took place back in 2018.
While the IRS is not requiring all employees to use the revised form, certain employees will be required to. This applies to anyone hired in 2020 and anyone making withholding changes during 2020.
If you do not submit a new Form W-4, future withholding will continue using information from your previously submitted form.
Before completing the 2020 Form W-4, please read the instructions that are included with the form. You must complete Steps 1 and 5. Steps 2, 3, and 4 are optional, but completing them will help ensure that your federal income tax withholding will more accurately match your tax liability. Step 1 is for your personal information; Step 2 is for households with multiple jobs; Step 3 is used to claim tax credits for dependents; Step 4 is for other adjustments (additional income such as interest and dividends, itemized deductions that exceed the standard deduction, and extra tax you want withheld); and Step 5 is where you sign the form.
Even if you are not required to complete the revised form this year, it is still recommended that you perform an annual ‘checkup’ to see if you need to make any adjustments to your current withholding. Your YHB advisor is happy to help with any questions or concerns.