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IRS Releases Draft Instructions for 2020 Income Tax Withholding

BY: APA Staff | 06/07/19

On June 7, the IRS released an early release draft of the new 2020 Publication 15-T, Federal Income Tax Withholding Methods, which will be used to figure federal income tax withholding using the newly revised draft of Form W-4, Employee’s Withholding Allowance Certificate. APA provided in-depth coverage of the draft 2020 Form W-4 in the June issue of Payroll Currently (Issue 6, Vol. 27).

How employers will figure federal income tax withholding for the 2020 Form W-4 is changing significantly. Both the draft Form W-4 and employer withholding procedures are being changed to comply with the income tax withholding requirements of the Tax Cuts and Jobs Act. The drafts were created so the public could comment on the changes.

Publication 15-T includes an Employer Withholding Worksheet; Percentage Method Withholding Tables; and Wage Bracket Method Withholding Tables. The worksheet is intended to allow employers to calculate the 2020 withholding amount using previously completed Forms W-4 or the newly designed form.

One of the biggest changes, beginning with the 2020 Form W-4, is that employees will no longer be able to request adjustments to their withholding using withholding allowances. Instead, employees will use the new Form W-4 to provide employers with amounts to increase or reduce taxes and amounts to increase or decrease the amount of wage income subject to income tax withholding. The withholding tables have been revised to include three filing statuses: single, married filing jointly, and head of household. APA will provide additional analysis of the new withholding instructions to APA members next week in the form of a Compliance Update.

APA to Comment

APA’s Government Relations Task Force IRS Issues Subcommittee plans to submit comments on the draft 2020 Form W-4 and Publication 15-T. Comments on the Form W-4 are due on July 1; comments on Publication 15-T are due on July 8. If you would like to be involved in the process, indicate your interest by completing the Contact Us form on the APA website.

To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out Payroll Source Plus!