Form W-4 Information for Employers

W-4 Employee Withholding Form
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A W-4 Form must be completed by all employees working in the U.S. so that the employer knows how much to withhold from the employee's paycheck for federal income taxes. The employee must indicate:

The New Tax Reform Law (2017) and Its Effect on W-4 Forms

The 2017 tax reform law has made major changes that will affect employee withholding. Many of your employees may want to change their W-4 form to avoid paying too much withholding. The IRS has issued what is (we hope) a final draft of the 2020 version, which is currently in proposed status and it shouldn't be used until it is finalized.

The 2020 form (when it's finally approved) must be used for employees hired after 2019 and for any employee changes to their W-4 form after 2019.

How the New W-4 Form Has Changed

Some changes noted on the new 2020 W-4 form include:

  • A new marital status of "head of household"
  • An adjustment for households that have multiple workers
  • Two worksheets to help employee figure out withholding
Your state may have changed its version of the W-4 form. Check with your state's taxing authority to see if they allow you to use the federal W-4 form.

You may not help an employee with a W-4 form. But you can direct the employee to the IRS withholding calculator which will walk them through the process.

When Must a W-4 Be Completed at Hire?

An employee must complete the form at hire before the first paycheck is provided. The IRS says employers are required to implement a new W-4 by the start of the first payroll period ending on or after the 30th day from the date you (the employer) received it. 

Here's an example. Josie gives you a new W-4 on November 10; she is paid on the 15th and the 30th of each month. You must implement it no later than the December 15 payroll. Of course, you may be able to implement it earlier, but that's not required. 

Changing a W-4

Employees may change the amounts on a W-4 form at any time and as often as they wish. The implementation timeline requirement above must be followed for changes as well as new hires.

There is no time limit on how long a W-4 stays in effect; it remains in effect until the employee changes it. At termination, the W-4 continues in effect for withholding of FICA taxes for payments made after the termination date. 

The most current W-4 must be signed by the employee and kept in the employee's payroll folder to verify the amount of federal income tax withholding.

If an employee wants to make a change to a W-4 for a bonus or other one-time pay change, you should give them enough notice so that they can plan for the W-4 change to be in effect with the same payroll as the bonus. 

Can I Accept W-4 Forms by Phone or Email?

No, you cannot accept information from an employee about a new or changed W-4 form by phone or email. The only way a change can be made is by completing and signing the W-4 form itself in person or by mail. 

You may be able to accept W-4 information electronically, through electronic systems that comply with IRS regulations.

U.S. States and W-4 Forms

Many U.S. states use their own variation of the W-4 form to record state withholding amounts. And some states do not allow electronic capture of W-4 information. Check with your state's revenue department for more information. 

Problems with W-4 Forms

A W-4 form may be invalid for several reasons, including that it is lacking the required information, lacking a signature, or if the form has been altered, or if the If you think a W-4 is not valid, you must continue to withhold based on the previous W-4. If the invalid W-4 form is the first one, the IRS says you should withhold as single with zero allowances. 

Employees cannot withhold a flat percentage or dollar amount. They must use W-4 and IRS tables and withholding methods.