Understanding Form W-4 (2020)

• A W-4 is a tax form employees complete to inform employers how they want their federal income tax withheld.
• All W-4s include a filing status, influencing how taxes are filed at year-end; statuses vary slightly based on the W-4 version.
• W-4 forms have fields for dependents/allowances and other data to specify federal tax withholding preferences.
• IRS W-4 FAQs, FAQs on the 2020 Form W-4, and Internal Revenue Service provide more information.

2020 (Current Version)

• Key extractable fields: Status, Multiple Jobs/Spouse Works, Claim Dependents/Other Credits, and Other Adjustments.
• Status (Step 1c) options: Single, Married filing separately, Married filing jointly, Qualifying surviving spouse, or Head of Household.
• Multiple Jobs or Spouse Works (Step 2c) is a checkbox, often seen as Yes/No or True/False in reports.
• Claim Dependents and Other Credits (Box 3) are shown as dollar amounts.
• Calculations for demographics import: each $2000 equals one qualifying child under 17; each $500 equals one other dependent.
• For dependent calculations, use the simplest deduction: e.g., $2500 is assumed as one child under 17 and one other dependent.
• Other Adjustments contain individual fields for Other Income (Box 4(a)), Deductions (Box 4(b)), and Extra Withholding (Box 4(c)), with the latter being most common.
• Extra Withholding is the additional amount per pay period employees want withheld beyond the calculated federal income tax, often used by tipped employees.
• The items under Other Adjustments are less common but must still be checked.
• Each item under Other Adjustments is represented as a dollar amount.

2019 (Previous Version)

• Key extractable fields: Status (Box 3), Allowances/Exemptions (Box 5), and Additional Amount (Box 6).
• Status (Box 3) options: Single, Married, or Married but withhold at the higher Single rate.
• Allowances/Exemptions (Box 5) are calculated using the "Personal Allowances Worksheet" and represent a count of children, dependents, and other credits.
• Additional Amount (Box 6) is the extra amount per pay period employees want withheld, used by tipped employees.
• Exempt status is typically represented as True/False, Yes/No, or Exempt/Nonexempt in reporting.

W-4 Details for R365 Payroll Data Migration

• Years 2020 and 2019 act as indicators to find out the W-4 version used by an employee: 2019 indicates the previous version, while 2020 signifies the current one.
• Disregard the year indicated on electronic "paper" forms, use 2020 or 2019 to indicate the version.
• Legacy systems may lack full W-4 details in reporting.
• When extracting, ensure all fields for both W-4 versions are accounted for in reporting.
• If not all fields are present in reporting, manually extract them.
• Fill any blanks with zeros when processing information into the Demo Packet.
• Assume employees are NOT Exempt if tax exemption details are absent; reassign if listed as a status.
• W-4 Year is not an importable field but is needed to indicate the W-4 version for details.
• Systems might not explicitly state the W-4 version, especially when using reporting; statuses can indicate the W-4 version.
• Short statuses (Married, Single) indicate the 2019 version, while longer statuses (Single or Married filing separately, Married filing jointly, Head of Household) indicate the 2020 version.
• The presence of a "Two Job Indicator" indicates the 2020 version; absence indicates the 2019 version.