What is Form W-4 for 2020?
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Last modified 6/3/2020 10:24:55 AM EST |
Added by 123PayStubs Team
Form W-4 is a tax form called the Employee's withholding certificate, which is used by employers to calculate how much federal income tax to withhold from the employee’s pay. Every new hire is required to complete Form W-4 before their first paycheck.
The withholding amount depends on the gross wages of employees and the number of dependents they claim. The more the number of dependents, the lesser will be the withholding amount. In case, a minimal amount is withheld, then employees will generally owe tax upon filing the tax return, thereby leading to a penalty. If too much is withheld, then employees will receive a refund.
Employees can also claim exemption from withholding in Form W-4 if they do not have any federal tax liability for 2019 and 2020.
The IRS has redesigned the form W-4 for 2020, and not all employees have to fill out this new form. Employees whose first paycheck is in 2020 and for those who have changes in their withholdings have to complete the updated form.