Starting on January 1, 2020, every new employee and/or existing employee wishing to make federal tax withholding changes will be required to use a brand new Form W-4.
Why did form W-4 Change?
The Internal Revenue Service made substantial changes to the tax code that materially impact the 2020 tax year. As a result of these changes, the IRS released a new Form W-4. As you prepare for the next payroll tax year, you need to be aware of these important changes:
- Any new employee starting January 1, 2020 or later must use the new Form W-4 Employee’s Withholding Certificate
- Effective January 1, 2020 any employee that needs to make changes to their withholdings must use the new Form W-4 Employee’s Withholding Certificate
For more detailed information about this please see the IRS FAQs regarding the new Form W-4.
What you need to know
In order to implement the use of the new Form W-4 you are required to install Sage BusinessWorks 2020.
If you are on Sage BusinessWorks 2019 and do not use Payroll you are not required to upgrade to 2020. 2019 is still supported it just will not have any Payroll updates.
What it means for Sage BusinessWorks Payroll
Sage BusinessWorks 2020 will be released later this month. The 2020 release will be different because of the W-4 changes and will include the 2020 tax table update. There will be no 2020 tax table update for the 2019 version.
The 2020 release contains the 2020 tax updates and should not be installed until after the last 2019 payroll has been run. The 2019 W-2s should be printed prior to installing the 2020 release. Installing the 2020 release prior to printing W-2s will update the State and Federal limits and rates to the 2020 amounts. Installing the updates prior to printing the W-2s will require manual adjustments back to the 2019 limits and rates prior to printing the W-2.
The 2020 update is a full release. It requires table changes and your data will need to go through the data update process before using the 2020 version. This update must be installed at the server from the downloaded files first and then the client setup will need to be run on each workstation that uses Sage BusinessWorks (if using the network version).