The IRS has released a new Form 2020 W-4 that takes effect today, January 1, 2020. If you are a small business and are hiring employees today and after, make sure you are including the new Form W-4 in your on-boarding documents.
The IRS decided to redesign Form W-4 to streamline the process with straightforward questions. Now, when filling out the form, employees will no longer need to fill out complicated worksheets to figure out their withholding.
The new form is also supposed to bring an employee’s withholding closer to their true withholding, reducing refunds due and taxes owed during tax time.
Employees who have been hired before January 1, 2020 do not need to fill out the form. They only need to fill out the new Form W-4 if they decide they want to adjust their withholding.
Should an employee ask you for advice on how to fill out the form, you should recommend they contact their tax or financial professional.
From the IRS’ FAQ’s: “The new Form W-4 2020 an be used with respect to wages to be paid in 2020.”