Tax

IRS Revises Publication 15 Employer's Tax Guide and 15-A Employer's Supplemental Tax Guide for 2020

The IRS has issued the 2020 versions of Publication 15 [(Circular E) Employer's Tax Guide] and Publication 15-A [Employer's Supplemental Tax Guide (Supplement to Publication 15, Employer's Tax Guide)]. Publication 15 addresses the redesign of Form W-4 (Employee's Withholding Certificate), which must be used by all new employees in 2020 and all employees who make withholding changes beginning in 2020. Publication 15 no longer includes the percentage method and wage bracket method withholding tables. This information is now found in new Publication 15-T (Federal Income Tax Withholding Methods). Publication 15-T will allow employers to figure withholding based on a Form W-4 for an earlier year, as well as the redesigned 2020 W-4. Both publications address the new 2020 Form 1099-NEC (Nonemployee Compensation), which will be used to report nonemployee compensation paid in 2020. The publications also note that the 2020 Social Security and Medicare tax rates for employers and employees will remain at 6.2% and 1.45%, respectively.