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New Tax Act = New Employee’s Withholding Certificate

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There were a number of significant changes made to existing tax regulations when the Tax Cuts and Jobs Act (“TCJA”) was passed in 2018. As a result of the Act going into effect, it was necessary for the Internal Revenue Service (“IRS”) to develop a new Employee’s Withholding Certificate (“Form W-4”) that would account for the requirements of the new legislation.

Form W-4 Changes are Important for Employers and Employees   

Employees who are asked to complete the new form will notice that:

  • They can no longer claim personal exemptions;
  • Their income tax  withholding will be based on their filing status (i.e. single, married filing separately, married filing jointly, or head of household), while factoring in the standard deduction;
  • It is easier for those with more than one job to accurately determine the proper income tax withholding by reporting multiple wages, and spousal wages on the redesigned form;
  • They may elect to use deductions, such as the child tax credit, to adjust the amount of income tax withholding;
  • They can request that their employer withhold an additional flat-dollar amount each pay period to ensure their tax withholding is sufficient.

Employees and Employers Must be Alert to the Changes in the Act and to the 2020 Form W-4   

Whether new to a job or undergoing changed circumstances, employees faced with completing the updated Form W-4 for 2020 should consider utilizing the new IRS Tax Withholding Estimator to help them complete the Form W-4 correctly.

They should understand that if they don’t fill out the new Form W-4 when hired, their employer will treat them as single, taking the standard deduction, with no other adjustments.

If you have any questions, please contact your tax advisor or feel free to email Mariana Moghadam at