The 2020 W-4: Forging into the Upcoming Year

December 12, 2019

The IRS has released the 2020 W-4 form. Here is what the new form looks like and what you need to know about the changes on the document.

Photo of boy in mask and cape flexing his arms with confidence.

For those who are unaware, the IRS recently released the latest version of the Employee’s Withholding Certificate, which is the 2020 W-4. 

Now, the Form W-4 has a special place in your life, and in your employees’ lives.  In fact, this form probably has more relevance than many people actually realize.  Therefore, it is important that people understand the purpose of the W-4, and know how to complete the form.

So, here is what you need to know about the purpose of the 2020 W-4, as well as the kind of information the form requires you to provide.  Also, you will find out how to make sure you have the latest and greatest version of the form, so that you can forge into 2020 with confidence.

The Purpose of Form W-4

Now, we all know that the government is going to get their money from laborers one way or another.  Still, the government is not ignorant; they know that it’s easier to get something from someone if they make the process is easy.  So, that’s how the handy dandy Form W-4 came along. Another name for this form is the Employee’s Withholding Certificate.

In essence, the purpose of this form is to ensure that the government gets the appropriate amount of Federal Income Tax (FIT) through tax withholding.  Basically, the W-4 form shows employers how much money they are supposed to withhold from employee paychecks.  Furthermore, they accomplish this by withholding taxes on a per-pay-period basis, rather than demanding it in a lump sum.  This way, if an employee needs to make an adjustment, it can easily be done at any point within the year.

Since this form determines taxes based on income and allowances, it is important that employees complete a new one each time they change jobs, or if they have any major life changes.  Additionally, employees need to be sure that the employer withholds the appropriate amount by properly completing the form.  If employees don’t pay attention while completing the form, they could end up in tax trouble at the end of the year.

Completing the 2020 W-4

Image of the 2020 W-4 form.

Now, the withholding form comes complete with instructions.  In fact, it has comprehensive details to the tune of two pages, not including the page you have to fill in.  Clearly, the government wants to make sure there is no question about how to calculate your withholdings.

Related:  Start Your Engines: New Standard Mileage Rates for 2020

Nevertheless, as the employer you want to be available to assist in clarifying any questions the employee may have.  So, here are some details that will help guide you through the form.

On the first page, you are going to see five steps listed.  They are as follows:

Step 1:

First, employees will complete their personal information on the 2020 W-4.  This includes their name, address, social security number, and your marital status.  You need to know that the government uses their social security number to track their tax payments, so make sure it is accurate.  Also, they use the employee’s marital status to assess their tax payments depending on whether they are married or single.  It is important to note that these items had been broken out into several steps on the previous form, but now on the 2020 W-4, they are condensed into a single step.  So, if you see this information spread out into multiple steps, then you are probably using the outdated form.

Step 2:

Second, employees will claim any other work you are performing.  This is where the government makes sure that they are recouping the money from all jobs employees have.  So, if they have another job that does not withhold taxes, this is where they can make up the difference.

Photo of a man walking near waterfront with his dependents.

Step 3:

Third, employees will claim their dependents.  This step takes into account dependents who are children, as well as others who rely on the employee financially.  Claiming dependents will reduce the taxable income.  However, have your employees be sure to check the IRS Publication 501 to make sure their dependents are verifiable.

Step 4:

Fourth, employees will determine additional tax withholding on this form.  This step allows them to request additional tax to be withheld, depending on additional income they expect to earn from other jobs or dividends.  Also, if they want to reduce your withholding amount, they can claim additional deductions in this step.

Step 5:

Fifth, you and the employee will validate the Form W-4.  This is where the employer and employee sign and date the form to make it official.  

Again, while each step will have instructions, additional details are included on page two of the document.

Related:  Mi Casa Es Su Casa: Why Translating Your Business Is Important

Once employees have completed the Form W-4, the IRS recommends keeping it for a minimum of 4 years.  This is a matter of checks and balances to make sure that the employer has been withholding FIT according to the employee’s request.

Downloading the 2020 W-4

Form W4 Image 2 1
Photo by Mike MacKenzie | Source

Now, at first glance, the new and old versions of the form appear similar.  However, it’s necessary to be aware that the old form differs quite a lot from the new form.  You can download the 2020 W-4 from the IRS website.  Once you have downloaded a copy, it’s important to shred and recycle your old versions of the form.  Then, going forward, always make sure the version you are using was released on December 5, 2019.  The form should show “2020” up in the right-hand corner of the document.

As a valued Journey client, rest assured that you will always receive the most current versions of forms and documents.  This is a perk of Journey’s paperless onboarding service.  Furthermore, there is no upgrading required.  Finally, the best part is that Journey provides this as a complementary service to you.

Forging into 2020

Even though a new year and a new decade are upon us, some things never change.  We still must pay taxes, and therefore the government will see to it that they show us the easiest way to pay them.  So, now you have access to the 2020 W-4, and you know the information you are required to provide on the form.  That’s one thing you can mark off you year-end checklist!  Now you’re set to wrap up everything else so you can forge into 2020 with confidence.

Photo of fireworks lighting up the sky with "Happy New Year 2020," reflecting going into the new year with new forms confidently.

Subscribe to our newsletter

Get the latest from the world of payroll & HR delivered straight to your inbox!