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IRS Releases Draft of 2019 W-4 and Instructions

The IRS has released a draft of the 2019 Form W-4, Employee’s Withholding Allowance Certificate, and a draft of the 2019 Instructions for Form W-4.

The draft Form W-4 has been substantially revised to comply with the Tax Cuts and Jobs Act (TCJA). Both the way withholding amounts will be calculated and the form that employees will complete will be drastically different beginning in 2019.

The TCJA provides that an employee will be entitled to a withholding allowance (i.e., an amount of money to be subtracted from the employee’s wages each pay period) based on rules to be determined by the IRS.  The draft Form W-4 and instructions explain how this will be calculated.  The draft Form W-4 no longer includes a line for a number of allowance, but it does ask for other information about household income and tax credits, and it includes a summary of the instructions for completing the form.  More detailed instructions are included in a separate 11 page document.

Draft Form W-4

Filing status: Line 3 is used to indicate the employee’s tax filing status. The draft 2019 Form W-4 has checkboxes to indicate that the filer is single or married filing separately, married filing jointly, or head of household. Instead of claiming allowances based on filing status using a separate worksheet, the number of allowances will be calculated automatically based on the filing status that is checked – 2 if single or married filing separately, and 3 if married filing jointly or head of household.

Lines 5-8. Lines 5-8 are new and are optional, but completing them will provide more accurate withholding information. Line 5 is for nonwage income not subject to withholding; Line 6 is for itemized and other deductions (other than the standard deduction); Line 7 is for applicable tax credits; and Line 8 is for the total pay of lower paying jobs and is only used when employees have more than one job or are married filing jointly and both spouses work. Completing these lines requires information that employees may not want to share. Instead, employees may use the IRS Withholding Calculator or IRS Pub. 505, Tax Withholding and Estimated Tax to figure amounts to include on Line 7 (tax credits) or Line 9 (additional withholding per paycheck).

Draft instructions for calculating withholding

Withholding when the 2019 Form W-4 has no entries on Lines 5-10 will be the amount from the 2019 withholding tables in IRS Pub. 15 (Circular E), Employer’s Tax Guide, for the proper pay period, with:

  • 2 withholding allowances for single or married filing separately, and
  • 3 withholding allowances for married filing jointly or head of household.

If amounts are reported on lines 5, 6, 7, 8, or 9, the employer will have to make additional withholding calculations.

 

-Source:  American Payroll Association

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