Which employees need to complete a 2020 form W-4?

The 2020 Form W-4 is very different from previous versions to better reflect the Federal tax law changes that were updated with the passage of the 2017 Tax Cuts and Jobs Act.

Below is an overview of the most notable changes that go along with the 2020 Form W-4:
  • The Form W-4 was redesigned for 2020 by the IRS to better incorporate the changes from the Tax Cut and Jobs Act of 2017
  • The new form will allow employees to more accurately estimate the amount of tax they ask their employers to withhold starting in 2020
  • There are no longer Withholding Allowances as on previous versions of the Form W-4.  Instead, employees are required to enter dollar values for claiming dependents
  • Employees are also asked to provide adjustment dollar amounts for other incomes or deductions
  • In this simplified format, the Withholding Certificate can be completed in five steps, or less, depending on the employees' situations
  • The IRS has also developed a new Tax Estimator App to help employees calculate the most accurate withholding.  There is a link to this app directly on the new form or here
  • Current employees will NOT be required to complete this new form.  However, employees hired in 2020, or those who want to make a change to their withholding in 2020, must use this revised form
  • 2020 Form W-4 Explanations from the IRS
For 2020, the IRS redesigned Form W-4, Employee's Withholding Certificate, to be more in line with how taxable wages are calculated on the Individual Income Tax Return.  The most significant change is that there is no longer the use of withholding allowances, and the form asks employees to basically prepare an estimated tax return.
Per the IRS, all employees whose first paycheck is on or after January 1st, 2020 need to complete the new form W-4.   Your current employees who don't want to change their Withholding for 2020 do not need to fill out the new W-4 this year, as long as they were hired prior to January 1st, 2020.  That being said, if you have a current employee who wants to update their withholding, they do need to use the 2020 Form W-4. 
2020 is a transition year so the IRS designed the federal withholding tables so that they will work with both the 2020 Form W-4 and the prior year's version of the form.  By January 1st, 2021, all employees will need to have completed a new Form W-4.
Within Fuse, in the Tax Settings of your employees' profiles, if the column "2020 W4 Form" is set to "Yes" the system will use those tax table calculations that the IRS created for the new form.  If the column for "2020 W4 Form" is set to "No" then the system will use the old formula for calculating the taxes.
If your employees want to use the new 2020 Form W-4, the recommended method is to have them complete and submit the form electronically in Fuse, so when you approve it the system applies the settings to their Employee profile properly based on what they filled out on the form.