Issue/Symptom/Question

When I receive a W-4 from an employee how do I enter it into PENTA so that withholding is calculated correctly?

Applies To

PENTA version 20.4 and up

Payroll

Resolution/Fix/Answer

In late 2019 the IRS released an updated W-4 form that includes new fields that did not previously exist to be effective as of January 1, 2020. However, not all employees are required to submit an updated W-4 form so both the new version and the previous version are still supported. Penta updated the Employee Payroll Information screen to handle all both withholding scenarios.

 W-4 Withholding information is entered on the Federal W/H tab of the Employee Payroll Information window. Penta supports the following W-4 scenarios:

1. Employee has not submitted a new 2020 W-4 form and a pre-existing 2019 form exists
   1. PENTA uses the '2019 and Prior W4 Information' section. This contains the same fields that previously existed and functions the same way. Payroll withholding will be calculated using this information. Do not enter anything in the '2020 and After W4 Information' section.
   2. The IRS does not allow employees to submit a 2019 W-4 form after 12/31/19. PENTA will give you a warning if you try to enter this section should be updated after 12/31/19 only if there was an entry error.
2. Employee has submitted a new 2020 W-4 form and has a pre-existing 2019 version
1. Enter the 2020 W-4 form information in the '2020 and After W4 Information' section according to what has been filled out. For additional information on field descriptions click here.
2. The 2019 information was carried over and will remain in the '2019 and Prior W4' section
3. PENTA will calculate withholding based on the 2020 information and will ignore 2019 information
3. Employee has submitted an updated 2020 W-4 form when a 2020 form already exists.
1. Insert a new record in the '2020 and After W4 Information' section and enter the relevant fields
2. PENTA will calculate withholding based on the record with the effective date as of the pay date.
4. Employee has submitted a 2020 W-4 but does not have a 2019 W-4
   1. Create a record in the '2020 and After W4 Information' section for the W-4
   2. Do not enter anything in the '2019 and Prior W4' section
5. Employee has not submitted any version of a W-4
   1. Per IRS guidelines PENTA will calculate withholding as if Filing Status is Single and zeroes/nulls for all other fields
   2. Do not enter anything in either the 2020 and After or 2019 and Prior sections