The Internal Revenue Service made substantial changes to the tax code that materially impact the 2020 payroll tax year. As a result of these changes, the IRS released a new Form W-4. As you prepare for the next payroll tax year, you need to be aware of some important changes.

What you need to know

• Any new employee starting January 1, 2020 or later must use the new Form W-4 Employee Withholding Certificate.
• Effective January 1, 2020 any employee that needs to make changes to their withholdings must use the new Form W-4 Employee Withholding Certificate.
• Sage 100 2017 and earlier will not support the additional fields necessary to correctly calculate federal withholding taxes.

For more detailed information about this issue, please see the IRS FAQs regarding the new Form W-4. A draft of the new Form W-4 has been provided here by the IRS.

Action required

• If you are using Sage 100 2018 or 2019 install Payroll 2.20.0, due to be released mid-December 2019, and any later updates that are released.
• If you are using Sage 100 2017 or earlier you will need to work with your partner and upgrade to Sage 100 2018 or 2019 to remain compliant.

Note: Sage 100 Payroll is a separate installation from Sage 100 2018 and 2019. New fields in Employee Maintenance for entering the Dependent Amount, Other Income Amount, and
Deductions Amount for 2020 Form W-4 will be available only in Sage 100 Payroll 2.20.0 and later.

Important: If your upgrade is not complete before January 1, 2020 the federal withholding for your employees will not be calculated correctly. You will need to use the IRS calculator to
manually calculate federal withholding for any employees who use the new W-4 for every payroll until you have upgraded.

Questions?

Visit the Sage City Customer Resources page at www.SageCity.com/Resources page for additional resources, including links to Sage Knowledgebase, Sage City and Sage University,
as well as Live Chat and Online Case submission.