On May 31, the Internal Revenue Service (“IRS”) issued a draft of the 2020 Form W-4, which implements changes made following the 2017 Tax Cuts and Jobs Act.  For example, the revised form no longer uses withholding allowances.  In the past, the value of a withholding allowance was tied to the amount of the personal exemption, but because of changes in the law, employees can no longer claim personal or dependency exemptions.

Employees who have submitted Form W-4 in any year before 2020 will not need to submit a new form because of the redesign.  Employers can compute withholding based on information from employees’ most recently submitted Form W-4.  If, however, an employee is hired after 2019 or an existing employee chooses to adjust his or her withholding after 2019, they must use the revised form.

For more information about the redesigned form, see these FAQs.  The IRS is accepting comments on the proposed form through July 1.  Comments should be submitted to WI.W4.Comments@IRS.gov.

The IRS expects to release a near-final draft of the 2020 Form W-4 in mid-to-late July so employers and payroll administrators can start updating their systems.  The final version of the form is expected in November, and according to the IRS, will only contain minor adjustments.  Prior to the release of the final version, employers should continue to use the 2019 Form W-4.

The IRS also plans to release the related instructions for employers in the next few weeks.  The instructions will also be open for comments.