By Kelly Phillips Erb
The Tax Cuts and Jobs Act of 2017 (TCJA) is nearly a year old, and the Internal Revenue Service (IRS) is still struggling to figure out how to assist taxpayers with their withholding under the new law. The push from Congress to make things “simple” means that many taxpayers might not be withholding enough - and that may not change any time soon.
In February, the IRS released an updated form W-4, Employee’s Withholding Allowance Certificate (downloads as a pdf) to reflect changes in the new tax law. But the form didn’t cover situations for all taxpayers. So, in June, the IRS released a draft version of an updated form W-4—this one for 2019—on its website (downloads as a pdf). That draft was immediately met with criticism from tax professionals who feared that it might not protect taxpayers from claiming the wrong withholding.
The IRS clearly expected criticism, cautioning on the draft W-4 that “we anticipate it is likely that this form will change before being released as final.” The agency promised to revisit the form, and this week, issued a statement confirming that it will not release a 2019 form W-4 which is significantly different from the current form. A new draft of that form for 2019 will be available in the coming weeks, but it will look like the 2018 version.
As to the pushback? It was not insignificant. Tax professionals wrote letters expressing their concerns included Jean C. Nelsen, president of the National Association of Enrolled Agents (NAEA) and Annette Nellen, chair of the AICPA Tax Executive Committee. Nelsen called the draft form and instructions “too long and too complicated,” pointing out “the taxpayer is directed to reference up to 12 other publications and forms” (You can read the NAEA letter in full here). Nellen also called the form “unduly complicated,” noting that it “essentially requires taxpayers to calculate their tax liability.”