IRS Withholding Calculator in Excel

As discussed on pages 5 to 10 of the Tax Year 2019 M+O=CPE Individual Tax Year-End Workshop Reference Book, the major revision of Form W-4 for the 2020 tax year requires practitioners to adjust to a completely new withholding computation and to be able to interact with both the old and new system. 

Since the 2020 version of Form W-4 requires employers to make different withholding calculations than were made with past versions of the form, the IRS recently announced that it has created an Excel file that contains an income tax withholding assistant for employers.  The worksheet is geared toward smaller employers, and it is available from the IRS at: https://www.irs.gov/businesses/small-businesses-self-employed/income-tax-withholding-assistant-for-employers

Such employers can use the Excel file to enter the employee’s pay frequency, taxable wages and information from the employee’s Form W-4; once this information is entered, the formulas in the spreadsheet compute the federal withholding for the period.  

The file can be used for employees who have completed the 2020 version of Form W-4 or for employees who have completed Form W-4 from 2019 or an earlier tax year.