The W-4 form has just undergone a major redesign—the first since 1987.
Last year’s Tax Cuts and Jobs Act brought some changes that required a major overhaul.
The new W-4 form design reduces complexity while boosting accuracy and transparency, says the IRS. Instead of filling out confusing worksheets, employees can now answer some simple questions that promote accurate withholding.
Additionally, while the form used to be titled “Employee’s Withholding Allowance Certificate,” it’s now called “Employee’s Withholding Certificate,” as it no longer deals with allowances specifically.
You can also look at our head-to-head comparison of the 2019 vs. 2020 W-4 forms for more details.
To make these changes simpler, GoCo lets employees just answer a few quick questions — like whether they’re married and how many kids they have — and then does the math for them. We make the transition to the new W-4 form as smooth as possible for your HR team and employees by doing all the legwork.
Meanwhile, any changes to the I-9 are yet to be released.
Here’s a quick look at what every HR department needs to understand about both forms.
While the new design reduces the W-4’s complexity, it does ask specific questions that employees should complete as accurately as possible. The new W-4 features a five-step process within a single page that allows employees to declare any additional income.
The five steps for the new W-4 Form are:
While all employees must complete steps 1 and 5, they can choose not to complete steps 2 through 4. In this instance, the employer would withhold based on the identified withholding status with no other adjustments.
Although the W-4 form doesn’t specifically ask about exemptions anymore, an employee can still claim an exemption on it. The ADP Research Institute explains how: “To claim exemption from withholding, the employee must certify that they meet both conditions above by writing “Exempt” on Form W-4 in the space below Step 4(c) and completing Steps 1 and 5.”
The new form also allows individuals to request that additional tax be withheld without detailing the reason, which improves employee privacy. An employee can simply determine how much to withhold, then add that amount on line 4(c).
The I-9 form expired on August 31, 2019, but the U.S. Citizenship and Immigration Services (USCIS) has yet to release a new one. Thus, employers should continue using the existing form, and USCIS will announce the new form when it becomes available. The new form will likely look similar to the current one.
SHRM describes several proposed modifications to the I-9:
Set up an email alert for Google news related to the I-9 so you’ll hear about its release as soon as it occurs. You can also check the USCIS website regularly for any updates.
You don’t need to have all your current employees fill out a new W-4 form just because of the redesign. However, all new employees first paid on or after January 1, 2020, will now need to fill out the new W-4.
Likewise, if any current employees need to make adjustments to their withholding in January 2020 or later, they’ll need to use the new W-4.
If a new employee doesn’t complete the form in 2020, the employer should consider them a single filer with no adjustments.
Since 1986, employers must complete an I-9 form for all new hires. The employee must complete Section 1 by the end of the first workday, and the employer must complete Section 2 within three business days of the hire date. See our comprehensive guide to I-9 compliance for more details.
You must also reverify an employee’s eligibility to work in the U.S. when the documentation you have on file expires or if the employee has a legal name change. The USCIS offers a handy calendar showing when you need to reverify. Using software that helps you maintain worry-free compliance will ensure you always have your paperwork in order.
Take these steps, and you’ll be set up for success in 2020!