IRS Delays Major Tax Withholding Form Changes to 2020
The IRS aims to produce a major revision of its key tax withholding form, the W-4, in time for the 2020 tax-filing year, but not for 2019 as planned. The changes are caused by the extensive tax code amendments in the 2017 tax law.
The delay comes because of concerns raised by payroll and service-provider communities about adopting the new form and implementing a new withholding system in time for use in 2019, the Internal Revenue Service said in a statement available here.
The postponement is “good news,” Pete Isberg, president of the National Payroll Reporting Consortium, said. It would have been difficult for employers to adopt the changes that were implied by the draft Form W-4 released in June because they dramatically changed the nature of payroll withholding, Isberg said. Payroll administrators are going to need at least six months once it is finalized to revamp their system, according to Isberg. “So we’re going to need a relatively final substantial revision to the W-4 by June 2019 for the 2020 year.”
For the 2019 filing season, the IRS will issue in coming weeks a revised Form W-4 that will be similar to the current one, the IRS said.
“Launching the redesigned form in 2020 will allow the Treasury and the IRS to properly implement changes to the withholding system and ensure taxpayers have a positive and simplified experience,” Treasury Secretary Steven Mnuchin said in a statement.
