The IRS has released the 2020 Form W-4 Employee’s Withholding Allowance Certificate. The 2020 Form is to comply with the income tax withholding requirement of the Tax Cuts and Jobs Act (TCJA). Publication 15-T Federal Income Withholding Methods was also released as a result of the updated 2020 Form W-4.

The new W-4 includes fives steps for employees to complete. Not all five steps are required. Steps 1 and 5 are required, while Steps 2 through 4 are optional. Step 1 requires the employee to provide their personal information and indicate their filing status. Step 2 allows an employee to account for multiple jobs when calculating their withholding. Step 3 is where the employee can take into account the number of dependents. Step 4 allows an employee to claim other adjustments. Step 5 requires the employee to sign and date the form. The instructions to the form provide worksheets to assist employees with Steps 2 and 4.

If an employee claims exemption from federal withholding, they must write “Exempt” in the space provided below Step 4(c) and only complete Steps 1 (a), (b) and 5.

All new employees, as of January 1, 2020, must use the new W-4 form, and any employees hired before 2020 who want to adjust their withholding after 2019 must use the new form. Employees employed before 2020 that do not wish to change their withholding are not required to submit a new Form W-4, and withholding will be based upon a valid form previously submitted. If a new employee does not complete a W-4, they will be treated as a single filer with no other adjustments until a valid form is submitted.