About Form W-4, Employee's Withholding Certificate
Due to the federal tax law changes made by the 2018 Tax Cuts and Jobs Act, effective January 1, 2020, all employers must use the new W-4 Form for New Employees. This includes anyone rehired on or after January 1, 2020. The IRS does not require all current employees to complete the revised form.
If a current employee who has completed a previous W-4 wants to make changes to their 2020 withholding tax, the new form must be used.
The new form has five steps. Employees must fill out step 1 and step 5. Steps 2, 3, and 4 are optional, but completing them will ensure that your tax withholding will more accurately match your tax liability.
Texas State University staff can only answer general questions about Form W-4. It is recommended that employees use the IRS’s Tax Withholding Estimator, (www.irs.gov/w4App) for assistance. Also on the IRS website are Frequently Asked Questions that you may find beneficial as you complete the new form (https://www.irs.gov/newsroom/faqs-on-the-draft-2020-form-w-4).
Employees hired prior to 2020 are not required to complete the 2020 Form W-4 unless the employee wants to adjust their 2020 Federal Withholding. All employees hired (or rehired) in 2020 and beyond are required to complete the new Form W-4 upon hire.
If an employee hired prior to 2020 chooses to not complete the new form, the employer will continue to calculate withholding based on the information provided on the most recently submitted W-4 form.
If an employee hired in 2020 and beyond, does not complete the new form, the employer will withhold at the highest rate of Single with no adjustments for dependents or other income.
The new design replaces the personal allowance and deduction worksheets with more straightforward questions that make accurate withholding easier for employees.
- Allowances have been eliminated on the new form. In the past, allowances were tied to the amount of personal exemptions. Due to changes in law, you can no longer claim personal exemptions.
- Head of Household has been added as a new Marital Status Box.
- Adjustment for multiple jobs in a household has been added to allow a higher withholding rate for employees with multiple jobs or employees with spouses who work.
- Claim Dependents has been added to the form which will allow employees to directly enter their expected full-year tax credits.
- Other Income and Adjustments has been added to allow employees to enter the estimated full-year, non-wage income such as rental income, interest and dividends. The section also allows employees to enter full-year deductions such as mortgage interest and charitable contributions.
No. The form is divided into 5 steps. The only two steps required for all employees is Step 1 which includes personal information and filing status and Step 5, where the employee signs and dates the form.
Follow the steps below to complete the new Form W-4 via SAP Portal.
- Login to SAP Portal
- Click Payroll-Benefits.
- Click My W-4.
- Check “Tax Authority – Federal “
- Update your information.
- Check “Declaration” and Click Save
No, the new W-4 form reflects Federal withholding only.
The employee must contact a tax advisor or tax preparation service to assist in filing the income tax return. The employee can use the IRS Tax Withholding Estimator available at www.irs.gov/W4app.
Under Treasury regulations, a Form W-4 is invalid if any of the required information is missing or the employee doesn't sign the form. In addition, a Form W-4 is invalid if the official language on the form is deleted or otherwise "defaced", including alteration of the perjury statement or language that is not included on the official form. Finally, the IRS explains in Circular E, Employer's Tax Guide, that if on the date employees give the form, they indicate in any way that the information provided is false, the form W-4 is invalid. (IRC Section 31.3402(f)((5)-1(b); IRS Publication 15, Circular E, Employer's Tax Guide, rev 2019.)
There are many life events that can result in the need to change your tax withholding. Taking on a second job, a spouse getting a new job, and investment income, these are all reasons you may want to increase your withholding. Getting married, having a child, and increases in tax deductions are potential reasons to decrease your withholding.
You should use the IRS Tax Withholding Estimator available at www.irs.gov/W4app, or consult with your tax accountant or your tax preparation service.