According to the IRS website, it has launched a new online assistant designed to help employers, especially small businesses, easily determine the right amount of federal income tax to withhold from their workers’ pay.
To use the Income Tax Withholding Assistant for Employers, the employer starts by indicating their pay period frequency (for example, weekly, bi-weekly, monthly, etc.), and then enters key information from an employee’s Form W-4. For the tool to work properly, the employer must indicate whether the employee submitted a 2020 Form W-4, which does not base withholding on the number of withholding allowances claimed, or a prior version of the W-4, which does.
The employer can then save a separate customized copy of the file for each employee containing that employee’s Form W-4 information. Then, for each pay period, the employer simply opens the employee’s file and enters their gross wage or salary amount for that pay period. The tool will then automatically display the correct amount of federal income tax to withhold from that employee’s pay.
More information about the Income Tax Withholding Assistant for Employers, the redesigned 2020 Form W-4, and other tax topics of interest to employers and small businesses can be found on IRS.gov.
