Government compliance

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 W-4 Employee Withholding Certificate form.
• Effective January 1, 2020 any employee that needs to make changes to their withholdings must use the new W-4 Employee Withholding Certificate form.
• Sage HRMS 2017 will 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

Please be sure to update to the Q4 version set to be released on December 19, 2019. Releases following the Q4 release will also include the changes necessary for compliance.

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 Form W-4 for every payroll until you have upgraded.

Need help?

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

Year-end will be here before you know it! We're hard at work updating the Sage Year-end Center, but you can start getting ready now by bookmarking www.SageCity.com/YearEnd today!