A third withholding table relating to marital status is just one new wrinkle on the 2019 W-4 form.

There are numerous challenges ahead for employers and employees alike with the recently released draft of the 2019 Form W-4 from the IRS.

This form will have a new marital status box: Head of Household, with a third IRS withholding table to correspond with this new marital status, in addition to the existing tables for Single and Married Filing Jointly.

If you don't already have a headache, here are a couple other reasons this won't be easy for anyone:

  1. Employees won't be required to complete a new W-4 for 2019. Employers will still be need to accommodate 2018 and prior Forms W-4. That's right, payroll systems will need to maintain both 2018 and 2019 withholding systems simultaneously.
  2. State and local tax authorities will respond with similar changes. Many states rely on the federal Form W-4, so employees elect state withholding allowances using the federal form. Except that now there's no box for withholding allowances on the 2019 Form W-4. States will either issue their own W-4 equivalent, or revise their withholding formulas to follow the federal model. That's fine, but when? It seems likely that employers will be getting a lot of announcements from the states in, say, December — for January 2019 payrolls. No problem.

Overall, the greatest issue may be in educating employees about the new form, particularly the need to coordinate input between spouses for their respective jobs. Employees are also likely to ask whether they really need to disclose their spouse's or other income or deductions. Be prepared to offer alternatives, such as estimating an additional tax amount to withhold per pay period, which was the solution prior to 2019. Employees will also be able to use the IRS online calculator or IRS Publication 505, Tax Withholding and Estimated Tax, to bypass lines 5 and/or 7.

To learn more about the changes to the 2019 Form W-4, click here.

Tags: Tax Compliance Payroll Administration