The IRS has issued a draft form and instructions for the Employee’s Withholding Allowance Certificate (Form W-4) to enable employers to adjust their employees’ withholdings to comply with the Tax Cuts and Jobs Act (TCJA). This new form will be effective for tax years beginning after 2018.
As a result of the significant changes in the tax law, the front page of the proposed W-4 is asking for detailed personal tax information including an employee’s non-wage income, such as interest, dividends and spouse’s income, and the employee’s expected deductions and credits. Many employees may consider this information too personal to share with their employer. The draft W-4 has a note on the second page specifying that these details are not required. However, this specification is not included in the instructions for the W-4.
As an alternative to providing this detailed information, the instructions suggest the employee use the IRS withholding calculator to provide their employer with an estimate of the amount of tax that should be withheld.
AICPA’s letter to IRS on concerns with 2019 draft W-4