In 2021, the employee Form W-4 from the IRS drastically changed. See the new W-4 compared to the older version and see exactly what changed.
Transcript:
Hi, I’m Bill Elkins with Baron Payroll.
Most business owners have no idea that the federal W4 has drastically changed for 2021. Many (business owners) are still using the old W4 forms.
By the end of this video, you’ll know exactly what the new form looks like, and what income tax withholding forms all New York employees must complete.
There have always been two withholding tax forms for New York employees. One from the IRS, and one from New York State.
In the past, New York business owners have gotten away with collecting just the IRS W4 form. The information asked for on the New York State form was identical to the IRS form.
Starting in 2021 things changed, and the IRS drastically updated the W4. They used to ask for marital status and the number of exemptions. They don’t ask for that anymore.
Now the IRS asks if your employees work multiple jobs, what dollar amount your employees want to claim for their exemptions, and any other amounts for other income, other deductions if they want less withholding, and for any additional takes that they want to withhold more tax.
So, here’s the kicker. The IRS significantly changed its form, but New York State did not!
New York still wants employees to certify their marital status and number of allowances. That’s why New York business owners must now collect two withholding forms.
The IT-2104 for New York, and the W4 for the IRS. So, my recommendation for all New York business owners is to have all your employees complete new withholding forms for 2021.
Both the IT-2104 and the IRS W4. If you’re not 100% sure if you have all the required documents New York employers must collect, just give me a call.
Do you have the right W-4 on file for all your employees?
