How to comply with the 2020 W-4 and withholding changes

For decades, payroll departments have used two basic principles to withhold income taxes from employees’ pay. That’s about to change, thanks to the Tax Cuts and Jobs Act. The TJCA suspends the personal exemption amount, which doubles as the annual withholding allowance amount, through 2025. Critical flaw: The TCJA omitted granting authority to the IRS to require all employees to refile their W-4s with their employers. This anomaly has left employers and the IRS in a bind, since two radically different W-4s will be valid come next Jan.1; all pre-2020 withholding-allowance based W-4s and the 2020 W-4 (which is shaping up to be entirely different).