The IRS on May 31 unveiled a new preliminary draft of the 2020 Form W-4, Employee’s Withholding Allowance Certificate.
The IRS on May 31 unveiled a new preliminary draft of the 2020 Form W-4, Employee’s Withholding Allowance Certificate. Although an earlier version of the Form W-4 had been released last June, Treasury and the IRS pulled that draft based on broad concerns that it was too complex, a Treasury spokesperson confirmed to Wolters Kluwer on May 31.
The new, revised 2020 Form W-4, still very much in draft stages, becomes effective on January 1, 2020. Further, the IRS has emphasized that employees who have already submitted a Form W-4 prior to 2020 are not required to complete a new form merely because of the redesign.
Most notably, the IRS announced the following:
“The proposed Form W-4 provides taxpayers with a more accurate and transparent withholding system that places less burden on employees,” Treasury Secretary Steven Mnuchin said in a May 31 press release. “I am proud of our dedicated teams at Treasury and the IRS who worked for more than a year to develop and refine this redesign that reduces the complexity of the tax filing experience for hardworking Americans.”
Additionally, the IRS released a combined list of Frequently Asked Questions (FAQs) for both taxpayers and employers regarding the form’s redesign. Notably, in accordance with the TCJA’s changes to exemptions, the IRS no longer uses allowances on the new Form W-4, to “increase transparency, simplicity, and accuracy,” according to the IRS.
“The new draft Form W-4 reflects important feedback from the payroll community and others in the tax community,” IRS Commissioner Charles “Chuck” Rettig said. “The primary goals of the new design are to provide simplicity, accuracy and privacy for employees while minimizing burden for employers and payroll processors.”
For 2019, taxpayers should continue using the current Form W-4.
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