2020 W-4 Form Changes

Making sense of the new
W-4 is easy with Block

The W-4 form is changing in 2020. Good thing we’re experts in all tax code changes. We’ll help you complete the new W-4 form correctly. Also, check back soon for our W-4 calculator to understand your withholdings and how to adjust them.

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Understanding the
new W-4 changes

The new W-4 form will likely affect your refund or the amount you owe. It’s important to understand these changes so you’re not caught off-guard at the end of the year.

No more allowances

Withholdings are no longer based on your personal or dependency exemptions

More precise withholding

This could impact your refund or what you owe. We’ll help you understand them so you’re not surprised.

Spousal & side job incomes

You’ll need to factor in your total household income from all sources to complete the new W-4 form

New updates recommended

Update if you have a new job, had children, got married, or had a significant income change

Changes affect 2020

The new W-4 form takes effect starting January 1, 2020

Underpayment penalties

You could incur penalties if you do not withhold enough throughout the year

The five steps to completing the new W-4 form

It’s important to update your W-4 with your current information for more precise withholdings. If you do not complete a new W-4 form, your employer will calculate your withholdings based on the standard deduction only.

  1. Step 1

    Enter your up-to-date personal information including your filing status

  2. Step 2

    Enter income for multiple jobs and/or if your spouse works

  3. Step 3

    Enter your dependents if your income is less that the Child Tax Credit / Credit for Other Dependents phaseout thresholds

  4. Step 4

    Enter additional withholdings and additional income from things like investments

  5. Step 5

    Sign your updated W-4 Form and give it to your employer

  6. Steps 2–4 are optional contingent on your current life situation

Helpful articles and frequently asked questions about 2020 W-4 changes

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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.

Note: The questions and answers above were based on FAQs from the IRS.

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