On December 4, 2019, the IRS released its final version of the 2020 Form W-4.
Although the IRS released new withholding tables in 2018, the W-4 remained unchanged until now.
Significant changes to the W-4 were made to bring it in line with the Tax Cuts and Jobs Act (TCJA) which changed tax rates, deductions, credits, and personal exemptions. The TCJA changed the value of personal exemptions and dependency exemptions to zero.
The Most Significant Changes Include:
Key Points for Employers
Additional Information for Payroll Systems
A new Publication 15-T, Federal Income Tax Withholding Methods, will be released sometime in December for use with the new 2020 Form W-4. It will be available here. This publication will provide information on how to use the new W-4 with both automated and manual payroll systems and will include steps employers can take to determine federal withholding. The IRS posted an early release draft on November 4.
If you use a third-party payroll provider, double-check to make certain that the system will be updated and inquire about any additional steps the employer needs to take.
Remember: the employer is ultimately responsible for payroll even when using a third-party payroll provider.