Payroll News

IRS Alters Name on Revised 2020 Withholding Form Draft

Aug. 9, 2019, 1:51 PM

The name has changed on a second draft of the tax form employees are to file with employers for calculating withholding amounts in 2020.

A revised version of the draft 2020 Form W-4, “Employee’s Withholding Certificate,” was released Aug. 8 by the Internal Revenue Service. Employees filling out the form would no longer be able to claim withholding allowances, but would need to provide whole dollar amounts to employers is they want more accurate withholding during the year. The earlier version of the 2020 draft included the word “allowance” in the name of the form.

The second draft also removes the data field for claiming exemption from withholding, which is Line 7 on the 2019 Form W-4 and was included as Line 4d on the first draft of the 2020 form. Employees are instead to write “Exempt” in the space below Line 4c and complete only Step 1, Personal Information, and Step 5, the employee’s signature.

The revised draft Form W-4 is to be used for payroll system programming and no further substantive changes to the form are to be made, the IRS said.

A second draft of Publication 15-T, Federal Income Tax Withholding Methods, is to be released in the middle of August, the IRS said. The revised version is to contain separate income tax withholding calculations for use with the 2020 Form W-4 and Forms W-4 from previous years, which still are to be valid for income tax withholding if no changes are required.

Revisions to the form and withholding methods were required because the tax code overhaul (Pub. L. 115-97), which took effect Jan. 1, 2018, suspended the use of personal exemptions to determine individuals’ tax liability. The IRS had to change Form W-4 and withholding methods to more accurately calculate tax liabilities under the new law.

To contact the reporter on this story: Jazlyn Williams in Washington at jwilliams@bloombergtax.com and Michael Trimarchi at mtrimarchi@bloombergtax.com