The new form W-4 has been redesigned to reduce complexity by removing complicated worksheets and increase accuracy and transparency with straightforward questions. Allowances have been removed so personal and dependent exemptions cannot be claimed.
Do employees need to complete a new form each year?
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- The short answer: No, but it depends. A W-4 stays in effect until your employee submits a new form.
- Exception: If an employee claims exemption from withholding federal taxes, a new form must be completed each year by February 15th. If a new W-4 isn’t completed by the employee you must withhold tax from their earnings based on the last W-4 form that didn’t claim exemption or you must change exemptions to single with zero withholding allowance.
If employees change their withholding during the year, you should use the most current W-4 form. A current W-4 form should always be collected for new employees. You may ask for all employees to complete a new 2020 W-4, but are not required to.
The new form can be downloaded from the IRS: https://www.irs.gov/pub/irs-pdf/fw4.pdf
For more information and FAQs from the IRS: https://www.irs.gov/newsroom/faqs-on-the-2020-form-w-4
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