When to start using the 2020 W4

Good morning, ladies and gentlemen. Welcome to the people processes podcast where we dive deep into the tools, your laws and processes that you need to scale and grow your people processes. I'm your host, Rhamy Alejeal and I'm the CEO of people processes. My company helps organizations all across the USA streamline, optimize, implement, and revolutionize their HR operations. We've helped hundreds of companies and thousands of HR leaders across the world get their people processes right. Today, we are going to look into the new form W4 for 2020. We're going to talk about when it's used, how it's used, a little bit of the history of it, and we're going to actually open it up and walk through it together, but before we go that deep, I want to ask you to please subscribe to our podcast. You can find us on iTunes, Google podcasts, Spotify, Stitcher, pretty much any podcatcher of your choice. You can also subscribe at peopleprocesses.com which will give you exclusive subscriber only content and I'd love to see you there.Now let's dive right in. A little bit of history. In May 2019, not too long ago, the IRS issued a first draft of the 2020 form W4 employees withholding allowance certificate. This new form will help employees improve withholding accuracy and fully reflect the changes including in the TCG JA the tax cut and jobs act of 2017 which contained major revisions affecting taxpayer withholding. Since then, we've had to use the old form still and it doesn't provide as much information as is needed, and some irrelevant information based on the new law. The redesigned W4 no longer uses the concept of withholding allowances, which was previously tied to the amount of the personal exemption due to changes in the law.Personal exemptions are currently not a central feature of the tax code. The primary goals of the new design are to provide simplicity, accuracy, and privacy for employees while minimizing the burden for employers and payroll processors like us, at least according to the IRS. So what happened in August, 2019, the IRS released a second draft of the form. The title of the W4 was changed to employee's withholding certificate. Removing the word allowance from an entirely the computation of withholding did not change from the first draft at all. Employees who have submitted a form W4 in any year before 2020 will not be required to submit a new form merely because of the redesign. They made that clear in the instructions in the second draft, employers can continue to re compete withholding based on the information from the employees. Most recently submitted W4.So when do you start using this? You start using this on new hires starting in 2020. Also, if someone wants to make a change to their withholding in 2020, you use the new W4, not the old one, but you don't need to worry about blasting this out to all of your employees and getting new documents all for January. Just recently, December 4, 12 days before this recording, the IRS issued the final form W4 for 2020 changes since the last draft include basically minor edits to the verbiage. Also on page two under your privacy, more language was added to help the taxpayer understand exactly what went, what checking the box in step 2 may do to withholding. We'll talk about that in a second. Basically they gave a little bit more information. The IRS encourages all tax professionals to become familiar with the new forms so that they can help tax payers with proper withholding in 2020 so let's get into that form A.All right, so if you look at the W4, by the way, the link to the new W4 along with publication 15-T which is the third draft, it's not the final version, but it's the instructions for the form and it's in its third draft along with an FAQ provided by the IRS are all available and peopleprocesses.com. So if you're listening to this on iTunes or somewhere else, go on over there, subscribe while you're at it and get our newsletter and...