2020 W-4 Employee Withholding Certificate Support

Release Date: 12/10/19

Version: 8.2 and up

The IRS has issued a redesigned 2020 Form W-4 (Employee’s Withholding Certificate).  The new form no longer uses withholding allowances. Instead, there is a five-step process for determining employee withholding (only Steps 1 and 5 must be completed) for determining employee withholding as follows:
Step 1. For an employee’s personal information and his/her anticipated filing status to determine the standard deduction and tax rates used to compute withholding.

Step 2. For an employee who has: 
(1) more than one job at the same time, or 
(2) are married filing jointly and both the employee and his/her spouse work.

Step 3. Provides instructions for determining the amount of the child tax credit and the credit for other dependents that you may be able to claim when you file your tax return.

Step 4. For an employee to enter:
(1) other estimated income for the year (e.g., interest, dividends and retirement income),
(2) deductions other than the standard deduction to reduce withholding and
(3) any additional tax the employee wants withheld for each pay period.

Step 5. The employee signature and date under penalties of perjury.

Not all employees must use the 2020 Form W-4. The IRS is not requiring all employees to complete a 2020 Form W-4. The IRS designed the federal withholding tables so that they will work with both the 2020 Form W-4 and prior year versions of the form.

However, the following employees must use the 2020 Form W-4:
(1) those hired in 2020 and
(2) any employee who makes withholding changes in 2020.

The 2020 W-4 Form

Changes have been made to Payroll to accommodate the changes to the 2020 Form W-4.

If an employee designates that they have two jobs by checking the check-box in Step 2 of the W-4 form, different tax tables should be used when calculating the federal withholding amount. Payroll Setup has been changed to accommodate the extra tax tables.

Note: The standard head of household table is not used if the W-4 form is from 2019 or earlier.

Employee File Maintenance has been changed to accommodate the entry of W-4 specific fields. Please note that the fields have been rearranged and the numbering sequence has changed.

When accessing field 37. FWT Exemptions, the user now has the option to press the F1 key to enter the W-4 specific fields.

Once the F1 key is pressed, the user can enter the extra data from the 2020 W-4 form. If the W-4 Tax Tables have not been entered, the user will receive an error message stating "The W-4 Tax Tables in Payroll Setup are not entered. F1 key not allowed." and they will not be allowed to enter the W-4 specific fields until the W-4 tax tables have been entered.

If the W-4 tax tables have been entered in Payroll Setup, the user will be able to enter the following fields.

For Step 2 Checkbox: Enter this answer in the Two Jobs? field.
For Step 3 Dependents Allowance: Enter this amount in the Claim Dep$ field.
For Step 4 Other Income: Enter this amount in the Other Inc field.
For Step 4 Deductions: Enter this amount in the Deductions field.
For Step 4 Extra Withholding: Enter this amount in field 42. Added FWT.

Users can revert back to the old 2019 W-4 form format by pressing the F1 key from the 37. Claim Dep$ field.

The Numeric Employee List has been changed to print the new 2020 W-4 fields.

The new 2020 W-4 fields have been added to the Employee Audit Trail file and now print on the Employee Audit Trail Report.

Changes to Federal Withholding Calculations

If an employee has submitted a 2020 W-4 form, taxes are calculated using:

Std Deduction of zero if Two Jobs is set to Y, 12600 if married filing jointly, or 8400 for single or head of household.

Taxes will be calculated on the
Annualized income + Step 4 Other Income - Step 4 Deductions - Std Deduction.

If Two Jobs is set to Y, the new W-4 tables will be used to calculate taxes if entered. If Two Jobs is not set to Y, the standard tax tables will be used.

Note: If the W-4 tax tables are not entered, taxes will be calculated using the old method even if the W-4 information is entered for the employee.

Programs Added: NSCTLFIL.W36


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