The Tax Cuts and Jobs Act (TCJA) included many changes to tax code, including the elimination of personal exemptions. The value of a withholding allowance was tied to the amount of personal exemption.
As a result of the TCJA changes, Form W-4 was redesigned. Allowances are no longer used for the redesigned Form W-4. This change is meant to increase transparency, simplicity, and accuracy of the form.
The Lock In Letter is still in place until you are notified otherwise from the IRS. If locked into Single with no adjustments, you will not be able to claim any deductions on the new Form W-4 for 2020.
No. Employees who have submitted Form W-4 in any year before 2020 are not required to submit a new form merely because of the redesign. Employers will continue to compute withholding based on the information from the employee’s most recently submitted Form W-4.
New employees who fail to submit a Form W-4 after 2019 will be treated as a single filer with no other adjustments. This means that a single filer’s standard deduction with no other entries will be used in determining withholding. The IRS and the Treasury Department anticipate issuing guidance consistent with this approach.
Yes. Beginning in 2020, all new employees must use the redesigned form. Similarly, any employees hired prior to 2020 who wish to adjust their withholding must use the redesigned form.
