Instructions for reconfiguring employees for 2020

The information below relates changes made to the W-4 for 2020

About the FIT changes for 2020:

The IRS is encouraging, not requiring, employers to use the newly designed 2020 W-4 as they feel that the new form provides more transparency and accuracy. In addition to this, new tax law no longer allows personal or dependency exemptions. If you have employees that have not turned in 2020 W-4s, you can continue to use W-4 forms from 2019 and earlier. However, if you install a Tax Update with the 2020 configuration, you will still need to reconfigure your employees with the parameters outlined below. The reason for this is that the IRS has added 4 new tables to the withholding calculation and the new Head of Household filing status. If you have questions about this information, please contact us before proceeding.

Please do the following before installing updates with 2020 configurations:

  1. Make a backup of all of your companies.
  2. Make sure all pay periods are closed before installing. If you are not done with 2019, DO NOT install this update. You will not be able to do After the Fact Payroll or Employee Adjustments once you install this update. If you would like to install the Tax Update that includes Federal Income Taxes for 2020 but not the 2020 W-4s changes, please install contact us.
  3. Once you install a Tax Update configured for 2020, if you have not previously reconfigured your employees for 2020 W-4s, you will need to go to Payroll/Configure/Employees and reconfigure whichever employees you need to Calculate Payroll for in the future. In other words, you cannot run a payroll for any employee that has not been reconfigured. You do not need to reconfigure employees that you do not need to run payroll for.
  4. For tips on more efficient payroll configuration, see our Hot Topic: C21 Tips for Efficient Payroll

Configuration information for this Payroll Tax Update

Due to changes to Federal Income Taxes for 2020, you will need to reconfigure your employees before calculating your next payroll, even if you are not using 2020 W-4s unless you have already done so. Please keep this in mind before installing this Tax Update as you will need to reconfigure your employees in order for these Tax Tables to be implemented.

In Payroll/Configure/Employees, you will see the following Pay Factors for US FIT :
Configure Employees 

Exemptions – If you are using 2019 or previous Form W-4s, leave the number of exemptions as they are. If you are using 2020 Form W-4, use the chart below to enter the correct number:

Filing Status
Step 2
Number to enter
Married Filing Jointly

Step 2 NOT checked

3

Single, Head of Household, Married Filing Separately

Step 2 NOT checked

2

All Filing Statuses

Step 2 Checked

0


Other Income Amount –
Enter the amount in Step 4(a) of your 2020 W-4 Form.

Deductions Amount - Enter the amount in Step 4(b) of your 2020 W-4 Form.

Filing Status
- Use the tables below to enter the correct status.

2019 or previous Form W-4:
        

Filing Status
Status Code
Married Filing Jointly

M19 1 Job

Single, Married Filing Separately, or Head of Household

S19 1 Job

Nonresident Alien

NRA


2020 Form W-4 Step 2 NOT checked:

Filing Status
Status Code
Married Filing Jointly

M19 1 Job

Single or Married Filing Separately

S19 1 Job

Head of Household

H20 1 Job


2020 Form W-4 Step 2 Checked:

Filing Status
Status Code
Married Filing Jointly

MFJ20 2 Job

Single or Married Filing Separately

S20 2 Job

Head of Household

H20 2 Job

Nonresident Alien

NRA2020


Dependent Amount
– Enter the currency amount listed on 2020 Form W-4 in Step 3.

Exempt from Tax – Check this box if the employee is exempt from tax.

Additional Withholding – Enter the currency amount listed on the 2020 Form W-4 in Step 4(c). This is the additional amount to be withheld per pay period.

North Dakota SIT

Please be aware of the following changes to North Dakota statuses and allowances. You will need to reconfigure your employees in Payroll/Configure/Employees before you will be able to Calculate Payroll.

Form

Factor

Change

2019 Form W-4

Head of Household

Select Filing Status 19 Head of Household

2020 Form W-4

Head of Household

Select Filing Status 20 Head of Household

2020 Form W-4

Allowances

Enter Zero Allowances

 

Click here to download this Payroll Tax Update.