According to the IRS, there are three main differences between the old W-4 and the 2020 version:
1. Elimination of withholding allowances
In the past, the value of a withholding allowance was tied to the amount of the personal exemption. Due to changes in law, currently you cannot claim personal exemptions or dependency exemptions.
The W-4’s first page contains with new sections that ask for specific withholding-related information, including income from multiple jobs of the filer and spouse, non-wage income (such as dividends, interest, self-employment payments, and retirement plans), itemized deductions, and tax credits for dependents.
2. New worksheets
There are two new worksheets that replace the previous Personal Allowances Worksheet and the Deductions, Adjustments, and Additional Income Worksheet. Worksheet 1 is for the multiple job calculations. Worksheet 2 is for additional calculations for deductions, if applicable.
3. Updates to employee filing status
The old Form W-4 asked the filer if they were single, married, or married but withholding at a higher single rate. The 2020 W-4 poses three different options: single or married filing separately, married filing jointly, and head of household.
For more information regarding the 2020 W-4, please visit IRS.gov.
Also see: How to complete a 2020 W-4 in TiM