The United States Internal Revenue Service has just released a draft of the new Publication 15-T to provide insight on withholding obligations for employers.
The draft contains a first look at the new steps’ employers will take to figure federal income tax withholding in the upcoming year (2020). It provides instructions on how to properly calculate withholding for Form W-4, as well as, examples of percentage and wage bracket method tables.
The publication also provides a 4 -step worksheet for employers on what the procedure may look like based on 2019 tax parameters. The basic steps include:
Form W-4 (Employees Withholding Allowance Certificate) has been redesigned to improve transparency and simplicity in order to create a more accurate withholding process. The forms purpose is to allow an employer to withhold the correct amount of income tax from an employee.
The steps for Form W-4 is:
Its best to become familiarized with the new method so mistakes wont be made. Best of Luck!
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