Since the 2020 Federal Form W-4 was released, the elimination of withholding allowances has been a popular topic of discussion. Many states rely on federal allowances for tax withholding purposes. So, how will states react to the lack of federal allowances?
Recently, Wisconsin announced that they will not be using the federal Form W-4 in 2020 for state withholding purposes. Currently and in previous years, Wisconsin has used the Form W-4 as long as the employee’s federal allowances and Wisconsin exemptions were equal. With the removal of federal allowances on the 2020 Form W-4, Wisconsin will use their state withholding form, Wisconsin Form WT-4.
Beginning in 2020, Wisconsin will follow these procedures:
- Employees hired after December 31, 2019, will be required to fill out the Wisconsin Form WT-4
- Similar to other states, employees will not be required to fill out new forms for 2020; however, employers can request that they do.
- If employees are satisfied with their withholdings, employers can still use the withholding exemptions filed on the old Federal Form W-4 without requiring the Wisconsin Form WT-4.
- Employees that wish to change their withholding exemptions after 2019 must use the Wisconsin Form WT-4.
For more information, check out Wisconsin’s November release of the Withholding Tax Guide.