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IRS releases second draft of 2019 Form W-4

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The IRS has released the second draft of the 2019 Form W-4 (Employee Withholding Allowance Certificate). The form is almost completely unchanged from 2018 form. Once the final copy is released, employers should begin using the form as of Jan. 1, 2019, for new hires or any employees changing their withholding.

While the IRS sought to make changes to the 2019 form that would help taxpayers more accurately withhold based on tax reform’s significant changes, major revisions to the form are being delayed until 2020 following feedback from the payroll and tax communities.

Many comments on the first draft were highly critical, stating that the new form is too burdensome and complex and that it’s request for financial disclosure invades employees’ privacy. The uncertainty around the 2020 form comes amidst government watchdog reports that more people are under-withholding and will owe tax this year following tax reform. The IRS has stated that a major revision will help employees improve withholding accuracy and fully reflect changes included in the Tax Cuts and Job Act. In the meantime, the IRS is encouraging taxpayers to perform a “paycheck checkup” using the IRS withholding calculator located at irs.gov.

Employers should not offer employees advice regarding what they should be claiming for allowances. Refer employees with questions to the IRS calculator or to a tax advisor. Employers with questions should contact their account manager at 888-556-0123.