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Form W-4

Some payroll professionals believe that 2019 Draft Form W-4 is too complex

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

Draft 2019 Form W-4 (June 5)

Draft Instructions to 2019 Form W-4 (June 7) 

The American Payroll Association (APA) on August 9 conducted an online payroll chat on Twitter. One of the questions the APA asked payroll professionals was whether their employees will understand the instructions for the draft version of 2019 Form W-4 (Employee’s Withholding Allowance Certificate).

Background. The 2019 draft version of Form W-4, which is one full page, was posted by IRS in June. It is a more complex form than in previous years due to tax law changes in the Tax Cuts and Jobs Act (TCJA, P.L. 115-97, 12/22/2017) that nearly doubled the standard deduction, eliminated personal exemptions, increased the child tax credit, limited deductions for state and local taxes, limited the deduction for home mortgage interest, and changed the tax rates and brackets. The draft instructions are also more complex due to these changes. They are now separate from the Form W-4 itself, and are 11 pages long.

APA chat. Most participants on the chat responded with concern as to whether employees will understand the instructions for the 2019 Form W-4. One participant believes that the final version of Form W-4 and instructions must be made as simple as possible. Another said that the draft version of 2019 Form W-4 is too confusing. Someone else noted that the drastic changes to the form are likely to make employees uneasy since the form has been relatively the same for a long time. Another participant said that many of her employees are college students who even have difficulty completing the current Form W-4.

Ms. Hope Williams, one of APA’s Directors of Training, noted that the APA has told IRS that employers need the 2019 final version of Form W-4 to be issued by the end of August so employers can update and test their payroll systems. She added that “some employers may even require new Forms W-4.”

IRS has said that it expects to issue the 2019 final draft version of Form W-4 in mid-August and that it is hoping the payroll community will use this version to make programming changes to their reporting systems if IRS makes it clear that it does not expect any other major changes. IRS expects to finalize the 2019 Form W-4 in November.

References: For withholding by employers, see FTC 2d/FIN ¶H-4220 et seq.; United States Tax Reporter ¶34,024.

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