Hello and welcome to this presentation on the latest Form W-4 – and how to use it to compute withholding.

In this video you’ll learn: 1. How Form W-4 has changed 2.Where to find instructions 3.Where to estimate withholding...Now, let’s begin.

The IRS issued a new Form W-4 in 2020. The new design is simple, accurate, and gives employees privacy while minimizing the burden on employers and the payroll process. And, although employees don't have to give employers an updated Form W-4 they should be encouraged to update their Form W-4. Each employee is responsible for their own withholding.

An employer doesn't know the taxpayer's situation, so there's no way for the employer to know what to withhold without Form W-4.

Unlike the old form, there are no withholding allowances – which is why the title of the form changed to Employee Withholding Certificate.

The form has steps 1 through 5 to guide employees through it.

Let’s look at these important points about the new Form W-4. One difference from prior forms is the expected filing status.

The new form changes single to single or married filing separately and includes head of household.

The new form doesn’t have married but withhold at higher single rate is gone.

As with the prior version of Form W4 non-resident aliens should designate their status if they’re subject to the special withholding rules in IRS Notice 1392 entitled Supplemental Form W-4 Instructions for Non-resident aliens.

Employees eligible to claim exempt from withholding will notice that the new form is different. Employees who are eligible to be exempt from withholding, and those who file as non-resident aliens should use the space below Step 4(c).

Nonresident aliens refer to Notice 1392, available at www.irs.gov, for supplemental instructions.

If an employee has more than one job or is using the filing status of married filing jointly, and the spouse works, the best way to complete the form is by placing adjustments in Steps 3 and 4 for the highest paying job.

Then they can adjust based on the highest tax rates. A question we hear often, is “Must every employee submit a new Form W-4?” The answer is no, not every employee. If employees already submitted Forms W-4 and their tax situation hasn't changed, they're not required to submit a new form. Employers may continue to use the information from employees' most recent Form W-4 to figure income tax withholding. Two groups of employees must complete the new form: New employees and any employees who need to adjust their withholding. They must use the new form and not change their prior form.

Remember, for newly hired employees, in the absence of a valid Form W-4, the employer must withhold using the default withholding rule, which is the single filing status with no other adjustments And another common question is “May employers require all employees to submit a new Form W-4?” No, but employers may ask employees to do so as long as they explain that they aren’t required to.

Key resources available on IRS.gov will help you and your employees answer questions.

You can find them by searching keywords or the publication number. For example, go to IRS.gov and in the search box type “withholding” and the first thing that pops up is the Tax Estimator.

Some other excellent resources include: The “about Form W-4” page which has FAQs; the Tax Withholding Estimator, which is an interactive tool to make sure you have the right amount of tax withheld from your paycheck; Publications 505, 15-T, and 15.

If you’re an employer, you can use Publication 15-T, to find the federal income tax withholding methods and table to calculate your employees’ withholding. Because you’ll also have to withhold based on existing Forms W-4, the computations in Pub 15-T will allow you to figure withholding regardless of whether the employee has a Form W-4 from an earlier year or gives you a new Form W-4. Publication 15-T also allows you to figure withholding based on your payroll system, whether automated or manual and your chosen withholding method.

Please read the instructions for the Form W-4 and get familiar with Publication 15-T. You can find both on IRS.gov.

Publication 15-T has worksheets that explain how the Form W-4 works.

Visit the IRS Video Portal for other helpful videos. The IRS video portal contains video and audio presentations on topics of interest to employers, individuals and tax professionals. Some of the video clips are archived versions of live webinars.

For example, you can find a step-by-step video guide to the Form W-4 on irsvideos.gov.

For additional information about Form W-4 please visit these webpages at www.irs.gov: Publication 15-T, Federal Income Tax Withholding Methods; FAQs on the 2020 Form W-4; Payroll Tax Withholding Estimator New W-4; Detailed New Form W-4 How To Thank you for attending this presentation.