The Internal Revenue Service brings minor adjustments to the Form W-4, Employee’s Withholding Allowance Certificate. The changes for 2020 is unlike any other year. While you could claim allowances on the older versions of the form, for 2020, allowances have been removed from the form.
Now, with the newly issued W-4 Form, you’ll have to detail a brief explanation of your tax situation. The information on the Form W-4 regarding your tax situation includes whether you hold multiple jobs at a time or not, spouse work, dependent information and deduction amount.
There are no allowances to be claimed so the “allowances” will be related to your dependent information. On Step 3 of Form W-4, you’ll be asked to detail the number of qualifying dependent you have for the Child Tax Credit and Dependent Care Credit which are under the same credit referred to as Child and Dependent Care Credit.
Changes on the Form W-4 and Child Tax Credit
As of 2020, the Child Tax Credit amount is $2,000 and the Dependent Care Credit is $500. You’ll need to multiply these amounts for the number of people that qualify which you claim as a dependent. Step 4 of the form asks you to detail your deduction amount, income earned outside of jobs and whether you want to withhold extra tax or not.
In 2019’s W-4, you could select your filing status as Married but could withhold at a higher Single rate. This has been removed from the form as well and instead, you are able to enter the amount you want for each pay period.
The rest of the form remains pretty much the same as previous years. If you work at a second job, don’t forget to check the box found in Step 2 for both of the jobs. The new Form W-4 can be found from the link below.