Why Did Form W-4 Change?
The redesigned Form W-4 no longer uses the concept of withholding allowances, which was previously tied to the amount of the personal exemption. Due to changes in the law, personal exemptions are no longer a central feature of the tax code.
According to the IRS, the new form uses the same underlying information as the old design, but replaces complicated worksheets with more straightforward questions that make accurate withholding easier.
See Also: FAQs About the New Form W4
What You Need to Know
- Any new employee starting January 1, 2020 or later must use the new Form W-4.
- Effective January 1, 2020 any employee that needs to make changes to their withholdings must use the new Form W-4 Employee Withholding Certificate.
What It Means for Sage 100 Payroll
If you’re already using Sage 100 2018 or 2019, simply install Payroll 2.20.0 which was released mid-December 2019. If you’re running Sage 100 2017, an update is required in order to avoid having to perform manual tax calculations with each check run. If your upgrade is not complete before January 1, 2020, you can still run payroll but the federal withholding for your employees will not be calculated accurately by the system and would need to be corrected manually.
Note: Sage 100 Payroll 2.0 is a separate install from the core Sage 100 2018 or 2019 modules.