3. New Form W-4 as of 2020
The IRS has released a new W-4 for 2020. It is the responsibility of the church employees who process payroll and make payroll tax deposits to stay informed regarding this new information. We encourage all employees who are responsible for payroll to read the IRS Publication 15-T explaining these changes.
The following are some important items to take note of:
All employees hired beginning with 1/1/2020, are required to complete the new Form W-4. This requires your Church to use the new tax tables required by the new form.
Any employees hired before 2020 are not required to update to the new W-4; however, we suggest requiring all employees to update to the new form.
The purposes of this updated form are to more accurately reflect the changes seen with the Tax Cuts and Jobs Act from 2018 and to take into account multiple jobs within a household when determining what an employee should withhold.
There is a potential of needing 6 tax tables in PowerChurch just for Federal withholding. The potential six tables are:
Federal Married Rate (using the old W-4)
Federal Single Rate (using the old W-4)
Federal Head of Household Rate (using the old W-4)
Federal Married Rate (using the new W-4)
Federal Single Rate (using the new W-4)
Federal Head of Household Rate (using the new W-4)
5. Allowances are no longer included on the new W-4. This amount will be zero in the Deduction and Exemption Information screen for the tax tables using the new W-4.
6. The specific line items found on the first page of the new W-4 will be entered in the following screen:
7. For any employees hired prior to 1/1/2020 who are not updating their W-4, the tax tables must be manually updated within PowerChurch. The IRS updated tables for the new year can be found in IRS Publication 15-T. The withholding allowance must also be updated to $4,300.
This newsletter contains information about churches and tax matters. This information is general in nature and does not consider your organization’s specific circumstances. This information should not be treated as an alternative to taxation advice from an appropriately qualified professional. If you have specific questions, please consult Stewardship Resources, LLC (a division of Summit Tax & Accounting, PLLC) at (217) 877-6766 for advice tailored to your need.
