2020 Form W-4: Latest changes from the IRS & how to prepare Details on handling multiple jobs and exemptions If you ask the IRS, the revamped 202 Form W-4 will make employees’ federal income tax withholding “more accurate.” But to employees, a better description of the new form might be “more confusing”. And who’s going to end up fielding question from new hires and anyone who opts to fill out an updated W-4? That’d be you in Payroll. Zooming in on the form With the year-end clock ticking, the IRS has already been encouraged employers to start reworking their payroll systems using the Aug 8, 2019, draft of the 2020 W-4. What’s more, during it September Payroll Industry Call, the IRS zoomed in on some of the form’s potential trouble spots, such as: Having multiple jobs (Step 2) and Claiming to be exempt (Step 4). Right now, employees who have multiple jobs might not realize they can adjust their withholding. After all, they have to jump to a worksheet at the end of the instructions for that. On the 2020 form, though, after completing Step 1: Enter Personal Information, they’ll be hit with. Step 2: Multiple Jobs or Spouse Works. The IRS explained Step 2 changed from the May 30, 2019, draft. It had been Step 2: Account for Multiple Jobs. Now, it’s clearer the Step 2(c) check box indicates there are two jobs in the household – and Payroll should divide the standard deduction and tax bracket equally between the two jobs. If employees complete Step 2(a) or Step 2(b) instead of Step 2(c), it’ll take them longer, but they won’t be revealing to you that they have more than one job or their spouse works. From Step 2(a) or Step 2(b), the form will send employees to Step 4(c) to enter additional amount for Payroll to withhold each pay period. As for Step 4, the IRS again noted changes between the first and second drafts – Step 4 (d) is gone. In fact, there will be no mention at all of exemption on the form itself. The IRS said its goal was simplicity, but you’re probably already anticipating some chaos. Tell employees who want to claim exemption they’re supposed to write “Exempt” below Step 4 (c). They’ll have to read the form’s instructions to decide if they’ve met conditions. More info: irs.gov/FormW4