IRS Releases Updated Withholding Form for 2019

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A final, updated version of Form W-4, Employee’s Withholding Allowance Certificate, was released December 11, 2018, by the Internal Revenue Service (IRS).

The final version of the form for use in tax year 2019 doesn't differ much from the 2018 version, which is now in use, and retains the use of withholding allowances with the amount of one annual withholding allowance at $4,200 for 2019.

Included with the form is a worksheet and instructions for employees with multiple jobs or working spouses, non-wage income, guidance for heads of households, and credit for other dependents. 

The IRS released interim guidance Nov. 26 that withholding allowances would be applied for the 2019 Form W-4 and the withholding methods for 2019, which also were released Dec. 11 in Notice 1036. The guidance proposed eliminating one of the alternative-withholding procedures--the combined income tax withholding and employee FICA tax withholding tables because of “unintended complexity and burden of the method,” the agency said in Notice 2018-92.

The temporary suspension of the requirement that employees must give employers new Forms W-4 within 10 days for reductions in allowances solely resulting from changes made by the tax code overhaul (Pub. L. 115-97) remains until April 30, 2019, the IRS said. If an employee has a change of status no later than April 30, 2019, that reduces the number of withholding allowances because of the tax code overhaul, the employee may submit a new W-4 by May 10, 2019, the agency said.

The notice said that until further notice, for workers failing to file valid Forms W-4, employers are to withhold tax based on a single status filer with zero withholding allowances. Separately, for those failing to file Forms W-4P addressing pension and annuity payments, employers are to apply withholding based on a married individual claiming three withholding allowances.

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Redesigned Form W-4 Expected for 2020 Tax Year

Originally, the redesigned Form W-4 was to be implemented for the 2019 tax year, with a draft released by the IRS this past June. The draft contained significant changes based on the recent overhaul to the Internal Revenue Code that took effect January 1, 2018. In response to concerned business owners and payroll organizations that there would not be enough time to properly implement the changes, the IRS pushed the redesigned Form W-4 to the 2020 tax year to ensure a smooth taxpayer experience. 

In a U.S. Department of the Treasury press release, Secretary Steven T. Mnuchin issued this statement regarding the redesigned Form W-4:

"The Treasury and IRS are working diligently to implement the most comprehensive tax legislation in more than 30 years. Launching the redesigned form in 2020 will allow the Treasury and the IRS to properly implement changes to the withholding system and ensure taxpayers have a positive and simplified experience."

IRS updates related to the W-4, including information about legislation related to the form, may be found at the agency’s website www.irs.gov/FormW4.

At Axcet HR Solutions, we have more than 30 years experience managing human resources, benefits, payroll, safety and workers' compensation duties for small- to medium-sized businesses in the Kansas City metro. Find out more about our payroll and payroll tax administration services.

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Jo McClure

Written by Jo McClure