The new version of the 2020 Form W-4, Employee’s Withholding Certificate, was issued Dec. 4, 2019. Employees filling out the form no longer are to be able to claim any withholding allowances.

The one-page Form W-4 is divided into five instructional sections:

  • Step 1, Enter Personal Information, includes Steps 1a, 1b, and 1c;
  • Step 2, Multiple Jobs or Spouse Works, includes Steps 2a, 2b, and 2c;
  • Step 3, Claim Dependents;
  • Step 4, Other Adjustments, includes Steps 4a, 4b, and 4c; and
  • Step 5, a field for the employee’s signature and date.

Three fields for the employer’s name and address, the employee’s employment date, and the employer identification number are unnumbered.

The 2019 Form W-4’s Line 5 for the total number of allowances was replaced by Steps 3 and 4 for employees to indicate dollar amounts. Steps 2, 3, and 4 may be skipped if they do not apply to the employee.

All data fields on the 2019 form were renumbered on the 2020 form, though some retained the same purpose and similar wording. The following steps were revamped or renumbered on the 2020 form:

  • Step 1: The filing status ‘‘Married, but withhold at higher Single rate’’ was removed. A ‘‘head of household’’ status was added that may be selected by unmarried employees paying more than half the costs of maintaining a home that includes a qualifying individual. 

Line 4 on the 2019 form, used to indicate whether the employee’s name is different from what is shown on their Social Security card, was replaced with an unnumbered notice to contact the Social Security Administration about name and card mismatches.

  • Step 2: Employees are to use this field if they work more than one job at the same time or are married filing jointly and their spouse also works. Employees are instructed to do one of the following: 2a, use the Tax Withholding Estimator for withholding guidance; 2b, use the Multiple Jobs Worksheet and enter additional withholding amounts on 4c; or 2c, check the box to request a higher withholding rate.

The instructions recommend that only employees with two jobs in their household check the box in Step 2c for both jobs. However, employees with one job in the household may check the box in Step 2c to increase withholding.

Employees with privacy concerns are encouraged to use the Step 2 options to avoid reporting amounts on Steps 4a and 4b.

  • Step 3: Employees enter the amount of tax credits that they expect to claim. This amount reduces the amount of tax withheld.
  • Step 4a: Employees enter the amount of other estimated income that does not come from a job. This amount increases the total amount of taxable wages.
  • Step 4b: Employees enter the amount of deductions that they expect to claim other than the standard deduction. This amount reduces the total amount of taxable wages.
  • Step 4c: Employees enter any additional tax amount to be withheld each pay period. Step 4c replaced the 2019 form’s Line 6, and the wording of that field generally did not change.
    Employees only are to enter amounts on Steps 3, 4a, and 4b for one job in the household. The instructions recommend that these lines be completed for the highest-paying job to ensure more accurate withholding.

Employees only are to enter amounts on Steps 3, 4a, and 4b for one job in the household. The instructions recommend that these lines be completed for the highest-paying job to ensure more accurate withholding.

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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

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