Tax reform in 2017 made changes to wage withholding. Many of these changes went into effect in 2018. All the changes are now captured in a revised Form W-4 which employers must use starting this year.
The New Form W-4 is called “Employee Withholding Certificate.” It looks different as it is now a full page with instructions, worksheets and tables on separate pages. Withholding allowances are no longer used.
The IRS has provided guidance on the new process for calculating income tax withholding. Click here for information.
The link includes an Income Tax Withholding Assistant for Employers which is a spreadsheet tool to help businesses use the new system. There is also a webinar on “Understanding the 2020 Form W-4 and How to Use it to Calculate Withholding” which may be accessed by clicking here.
Employers can access these IRS tools if they need help implementing the new W-4 requirements.