2020 W-4 Form Changes

The new design simplifies the form and increases the transparency of the withholding system. The form uses the same information in a different way to make accurate withholding easier.

You’ll provide your completed Form W-4 to your employer.

If you have an older W-4 on file with your employer and you’re happy with your previous refund amount, you won’t need to complete a new one just because the form changed.

You should complete a new W-4 when you start a new job, get married, or have a child if you want more accurate withholding. It’s also a good idea to update your W-4 if someone in your household starts a new job.

The form was redesigned to more closely match your withholding with your tax liability, which reduces the likelihood of a refund.

Two ways you can withhold more include:

• Entering on line 4c the additional amount you would like your employer to withhold from each paycheck after your Form W-4 takes effect.
• Checking the box in Step 2(c) to have an additional amount withheld for reasons other than multiple jobs.

Whether you will be due a refund – and how much – depends on the details of your entire tax situation.

The only two steps required for all employees are Step 1, where you enter personal information like your name and filing status, and Step 5, where you sign the form.

Completing Steps 2 – 4 (if applicable) means your withholding should more accurately reflect your tax liability.

You should increase your withholding if:

• You have more than one job or you and your spouse both have jobs (Step 2) or
• You have income from sources other than jobs that is not subject to withholding (line 4a).*

Without these adjustments you will likely owe additional tax when filing your tax return, and you may owe interest and penalties.

*For income from other sources, you can pay estimated tax instead of having extra withholding.

You should decrease your withholding if:

• You qualify for income tax credits such as the child tax credit or credit for other dependents and/or you qualify for deductions (other than the standard deduction). To decrease your withholdings by the appropriate amount, you can follow the instructions described in lines 3 and 4b.

The income from additional jobs may put you into a higher tax bracket, which has higher tax rates. To account for that, you should generally withhold more money from the combined pay compared to what you would withhold for each job alone.

Multiple job withholding adjustment tips

• In addition to Step 2, Steps 3 and 4 will also be more precise if reported on the W-4 for the highest paying job.
• If pay at both jobs are similar, it’s less important which W-4 is used to make adjustments.

If you have self-employment income, you’ll generally owe self-employment tax along with income tax. With this type of income, you will not have withholding.

You can either:

• Make adjustments to your W-4 with your employer to account for your self-employment income or
• Pay quarterly estimated taxes to cover this income using Form 1040-ES, Estimated Tax for Individuals.

Yes. The IRS has a Tax Withholding Estimator at https://apps.irs.gov/app/tax-withholding-estimator that will be updated for the new form in January.

H&R Block will also have a new calculator in 2020.