In order to align the Form W-4 for employee withholding with the new Federal Tax Cuts & Jobs Act of 2018, the IRS has issued a new Form W-4 for the year 2020.
What must you do as an employer?
- Beginning January 1, 2020, insure that the required employees provide the completed 2020 Form W-4.
Who must complete the 2020 Form W-4?
- New hires to be first paid beginning 1/1/20
- Any employee that wishes to update their withholding
- Any employee that claimed exempt from withholding tax in the prior year
- Insure that your payroll system is updated and ready to comply with the new Form W-4.
If you use Sage 50 (formerly PeachTree) as your payroll system, they require that you update to the 2020 software in order to access the 2020 Form W-4 in the payroll system.
If you use QuickBooks Desktop for payroll processing, Intuit has incorporated the new 2020 W-4 as an option in the Employee Taxes setup. You must run an update to the Payroll Tax Tables to have access to the new form input.
IRS has provided the following resources for payroll withholding that is done manually or using a proprietary system:
The Frequently Asked Questions provided by IRS will be helpful in implementing the new 2020 Form W-4 by you, as an employer, and for questions your employees have when completing the new form.
Your JamisonMoneyFarmer PC Client Accounting Services team or your JMF Accountant will be glad to assist and answer questions.