IRS Unveils Updated Draft 2020 Form W-4

13 August 2019

The IRS has unveiled an updated, newly named draft 2020 Form W-4. Once finalized, the revised form is expected to become effective on January 1, 2020.

The TCJA-Related Evolution of IRS Form W-4

Following enactment of the Tax Cuts and Jobs Act (TCJA) (P.L. 115-97), an earlier version of the new IRS Form W-4 was originally released in 2018 for the 2019 tax year. However, the form was quickly pulled based on broad concerns surrounding its complexity, a Treasury spokesperson told Wolters Kluwer. One year later, the IRS released a significantly updated version of the draft Form W-4 last May, (TAXDAY, 2019/06/03, I.1).

Once more, several additional, substantive changes have been made to the new Form W-4, again after receiving extensive stakeholder feedback. The IRS’s release last week of the draft 2020 Form W-4, now called Employee’s Withholding Certificate, dropping the word “Allowance,” marks the second of three rounds of edits expected this year. Titles of the worksheets were revised, as well.

Mnuchin: New Form “Simplifies Tax Withholding Experience”

“Our dedicated staff at the Treasury and IRS worked tirelessly over the past year to produce a Form W-4 that is more accurate, transparent and simplifies the tax withholding experience for hardworking Americans,” Treasury Secretary Steven Mnuchin said in an August 9 Treasury press release. “We are proud that the Tax Cuts and Jobs Act lowered taxes for most Americans and are enthusiastic that the improved W-4 will help taxpayers better determine the correct withholding amount for their personal financial situation to more readily reap the benefits of historic tax reform.”

The redesigned draft 2020 Form W-4 uses a “building block approach” that replaces complex worksheets with straightforward questions, which will make it easier for employees to determine a more accurate withholding, according to the Treasury press release. Notably, employees who have submitted a Form W-4 with their current employer in any year before 2020 will not be required to submit a new form based solely on the redesign.

No Further Substantive Changes Expected

Additionally, Treasury and the IRS announced that no further substantive changes to the draft 2020 Form W-4 are anticipated beyond minor updates for inflation. A final version of the form is expected to be released this November.

By Jessica Jeane, Senior News Editor