2020 Form W-4 FAQ - University of Houston
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2020 Form W-4 FAQ's

  • Who is required to complete a 2020 W-4?

    • Required for all new employees completing a Federal W-4 form on or after Jan. 1, 2020.
    • Employees needing to update their exempt status for 2020
    • Existing employees are not required to complete a new form
  • How do I update my W-4?

    • You can update your W4 via the employee P.A.S.S. 
  • What is "new" with the 2020 W-4?

    • The form is now called Employee's Withholding Certificate
    • Withholding allowances are no longer used
    • New form provides options for more accurate tax withholding
    • New form is divided into 5 steps:
    • Step 1 (personal information and filing status) and Step 5 (signature) are required
    • Steps 2 - 4 may be used to establish a more accurate tax withholding
  • What are steps 2-4?

    Steps 2, 4a, and 4c if completed, will increase Federal tax withholding; completing Step 3 or 4b will decrease Federal tax withholding

  • Why would I consider increasing Federal tax withholding?

    • If you hold more than one job at a time or both you and your spouse have jobs (Step 2)
    • If you have income from sources other than a job that is not subject to withholding (Step 4a)
  • Why would I consider decreasing Federal tax withholding?

    • If you are eligible for income tax credits such as the child or other dependent tax credit (Step 3)
    • If you are eligible for deductions other than the standard deduction (Step 4b)
  • What do the options in Step 2 determine?

    Per the IRS, Step 2 allows the employee to choose one of three different options for more accurate withholding, which include tradeoffs between accuracy, privacy and ease of use:

    • Option 1 (Step 2a): Most accurate/private option – Use the Tax Withholding Estimator and enter additional amount on line 4c .
      • Allows employee to identify the extra withholding amount to enter on line 4c without revealing additional jobs/income information to their employer
    • Option 2 (Step 2b): Uses Worksheet 1 on page 3 of the W-4 form to provide roughly accurate withholding without use of the online Tax Withholding Estimator – calculates additional amount to be entered on line 4c.
      • Note: If either option 1 or 2 are used and the pay changes for any of the jobs used in the calculation a new W-4 will need to be completed to have accurate withholding
    • Option 3 (Step 2c): Easiest option – check box if only 2 jobs are held in household.
      • Least accurate and may result in over-withholding but generally will not result in under-withholding
    Reveals to the employer that multiple jobs exist in the household
  • Why should I consider using the Tax Withholding Estimator?

    Individuals may consider using the estimator in the following scenarios:

    • Expect to work only part of the year
    • Have dividend, capital gain, or self-employment income or are subject to additional taxes
    • Prefer most accurate withholding for a multiple job situation
    • Prefer to limit information provided in steps 2 - 4 on the Form W-4 but do not want to sacrifice accuracy
  • Where can I find the Tax Withholding Estimator?