Big Payroll News!

More exciting than the updated Volkswagen Beetle…Bigger than New Coke!

The IRS has unveiled the NEW Form W-4 and it can be found right here:

This new withholding form is the culmination of extensive IRS work over the past year. This work included the solicitation of feedback from the payroll tax community to create greater withholding symmetry with the Tax Cuts and Jobs Act, which took effect in 2018.

According to the IRS, important changes to the W-4 form include:

  • The elimination of the outdated “withholding allowances” concept
  • Greater “simplicity”
  • Greater “accuracy”
  • Greater “privacy for employees”

Employers should note:

  • All new employees hired as of Jan. 1, 2020, must complete the new W-4 form.
  • Much like New Coke, employees can use their old W-4 elections or choose to adjust their withholdings going forward based on the New Formula!
  • Any adjustments made after Jan. 1, 2020, must be made using the new W-4 form.
  • New hired employees after Jan. 1, 2020 must use the new W-4 form.

Employees will find the 2020 Form W-4 contains a single full page followed by instructions, worksheets and tables. Employees may also choose to use the new form to determine the impact of income from other jobs.

Could this new form be the panacea that decreases the number of taxpayers who either write a big check or await a large refund each April?

Does anyone miss Herbie?