Due to the Tax Cuts and Jobs Act, the Internal Revenue Service (IRS) has released a new federal Form W-4 Employee’s Withholding Certificate for tax year 2020. The new Form W-4 is significantly different than the previous W-4 forms.
Before completing the 2020 Form W-4, please read the instructions that are included with the form. You must complete Steps 1 and 5. Steps 2, 3, and 4 are optional, but completing them will help ensure that your federal income tax withholding will more accurately match your tax liability. Step 1 is for your personal information; Step 2 is for households with multiple jobs; Step 3 is used to claim tax credits for dependents; Step 4 is for other adjustments (additional income such as interest and dividends, itemized deductions that exceed the standard deduction, and extra tax you want withheld).
The IRS has provided the following guidance:
- Employees hired before 2020 are not required to submit new forms; withholding will continue based upon your previously submitted valid W-4.
- Employees hired before 2020 who wish to adjust their withholding after January 1, 2020, must use the new form. NOTE: Once a new form W-4 is submitted, you will not be able to revert your withholding to be based on allowances.
- Employees hired on or after January 1, 2020, will be required to use the new forms.
- Employees hired on or after January 1, 2020, who do not submit a valid W-4 form will be treated as a single filer with no adjustments.
If an employee has not completed a 2020 W-4:
- Since there was such a major change on the 2020 Form W-4, the marital status is the only field that is carried forward on Employee Self Service.
If an employee has completed the 2020 W-4:
- Entries from your most recent 2020 W-4 are carried forward and display as selected (Step 3 will display a total amount only).
Even though the IRS does not require all employees to complete the revised form and even if your tax situation has not changed, we recommend you perform a “paycheck checkup” to see if you need to make adjustments to your current withholding. To conduct the checkup, you can use the IRS’s Tax Withholding Estimator.
The IRS has also published Frequently Asked Questions that you may find helpful as you complete the form.
Please note that Ohio State cannot provide guidance on completion of the new W-4 or any related tax implications. We recommend that you contact your tax consultant with any questions you may have.
How to Adjust the Amount of Withholding
Your W-4 tax elections impact the amount of federal taxes withheld from each paycheck. You can review and make changes to your W-4 elections in the Workday Benefits and Pay Hub app.
Reasons Employees Review W-4 Elections
Employees may choose to review their federal tax elections when they receive a large tax refund or owe taxes for the previous tax year. Tax elections are also typically reviewed during significant life events like marriage, divorce, birth or adoption of a child, and retirement.
IRS Resources:
About Form W-4, Employee’s Withholding Certificate
Tax Withholding Estimator
Child Tax Credit