Understanding the changes in 2020 Form W-4 Who must complete Form W-4 changes in Form W-4 for 2020 How to fill out 2020 W-4 Form Home Resources Understanding 2020 W-4 Form Understanding 2020 W-4 Form - Updated on May 07, 2020 - 11:00 AM by 123PayStubs Team When hiring an employee, the employer will have the employee complete the IRS Form W-4. This form is used to determine the federal income tax amount to withhold from the employee paycheck every pay period. Here is a list of topics covered in this article. Table of Contents What is the Form W-4? Who must complete Form W-4? When must Form W-4 be completed? Why has the Form W-4 been changed for 2020? What are the changes in Form W-4 for 2020? How to fill out the New 2020 W-4 Form? Generate paystub with new 2020 Form W-4 What is Form W-4? Form W-4, Employee's Withholding Certificate is used to determine how much Federal Income Tax that an employer can withhold from the employee's Paycheck. Who must complete Form W-4? Employees must complete Form W-4 and send it to the employer. The withholding information is subject to review by the IRS. When must Form W-4 be completed? Form W-4 must be completed by the employee whenever he or she changes their job or any life-changing events occur like marriage, divorce, or the birth of a child happens, or they are starting a new job or second job. Sometimes employees may find the withholding amount is too less or too high for the previous year when preparing their annual income tax return. In such cases, they must complete Form W-4 to change the withholding amount. Tired of switching back and forth between 2019 and 2020 Form W-4 for different employees? Calculate employee withholdings based on both 2019 and 2020 Form W-4 easily and issue pay stubs with accurate tax calculations using 123PayStubs. Get your first pay stub for free! Create Paystub Now Why has the Form W-4 been changed for 2020? With the new 2020 Form W-4, the IRS is trying to reduce the complexity in the Form and to increase the transparency and accuracy of the withholding system What are the changes in Form W-4 for 2020? No More Withholding Allowance The earlier version of Form W-4 titled "Employee’s Withholding Allowance Certificate", is now "Employee’s Withholding Certificate". One significant change that the IRS has brought in is that now employees can't use Form W-4 to claim the withholding allowance. What this change brings is that employees can claim only for the dependent or use the deduction worksheet to reduce the taxes withheld, whereas with the earlier version of Form W-4 allowed employees to claim more allowance to lower the taxes withheld. No More Personal Allowance Worksheet The Tax Cuts and Jobs Act eliminates personal exemptions too. The worksheet for calculating the personal exemptions is removed in the updated version of Form W-4. However, the IRS retained worksheets such as Multiple Job and Deduction in the 2020 Form W-4. Not all Employees are not required to complete the updated version of Form W-4 Employees who have already submitted their Form W-4 might not be required to complete the new 2020 Form W-4 unless there is a life-changing event like marriage, divorce, or the birth of a child happens, or they are starting a new job. Exemption from Withholding The employee may now claim exemption from withholding for 2020 if they meet the following conditions: Had no federal income tax liability in 2019 Expecting to have no federal income tax liability in 2020 How to fill out the new 2020 W-4 Form? It’s simple. Fill out the New 2020 W-4 Form in 5 simple steps. Complete Step 2, 3, and 4 only if they apply to you. Otherwise, skip these steps. Personal information: Enter the personal information and choose the filing status as single or married filing separately, Married filing jointly, or Head of household. Multiple jobs or spouse works: This step needs to be completed only if the employee has more than one job at a time or the employee’s filing status is married filing jointly and the spouse also works. Employees only need to complete any of the options: (a) Withholding estimator, (b) Multiple jobs worksheet, or (c) If the employee has only 2 jobs in total with almost the same pay. Dependent details: Claim dependent details such as the amount of the child tax credit and the credit for the dependents that you can claim when you file the tax return. Other adjustments: Other adjustment details such as other income (not from job), itemized deductions, and any extra withholding. Sign Form: Sign the form and submit it to the employer. Takes more time to calculate employee withholdings based on Form W-4? Calculate employee federal income taxes easily and accurately by providing a few basic details using 123PayStubs. Generate professional pay stubs for employees with accurate tax calculations. Create Paystub Now Just Getting Started? Get help that you need. Support Center Access our support center for frequently asked questions and answers about 123PayStubs. Blogs Find out the trending topics in the payroll industry and the product updates from 123PayStubs. Resources Access our resource articles that would help you get more insights about managing the payroll manually. Helpful Videos Generate Paystubs with Accurate Tax Calculations How to Create Pay Stubs for Independent Contractors Best and Free Paystub Templates to use in 2020 View More Still have questions about our online paystub generator? Reach out our customer support team by chat, email or phone for any questions that you may have regarding our paystub generator. email@example.com Chat Support 123PayStubs Templates Pricing Support Resources Blog Our Express Products ExpressEfile ExpressExtension ExpressTruckTax ExpressTaxExempt Get In Touch 123PayStubs 2685 Celanese Road, Suite 103, Rock Hill, SC 29732.