2020 IRS Withholdings?

[Joel]

Alright, I’m trying to make some changes to our withholdings for this year, and I’m now being required to use the new withholding form. First of all, change sucks.

I’m using the salary paycheck calculator here:
https://www.paycheckcity.com/calculator/salary/

I’m trying to set our federal withholdings at my wife’s employer to $0 since my severance payout had more withheld than we would owe for the entire year. I got everythign filled out at the salary paycheck calculator above said that $0 would be withheld for federal taxes, but then we get the first paycheck and they withheld almost $94. Ugh.

It’s very hard to get anything clear online that explains how the form should work I think the salary paycheck calculator is correct, as we have used it for several years and it was always accurate under the previous withholding scheme. I’m predicting that my wife’s employer isn’t properly handling the new withholding tables. Any advice on how to fix this?

Thanks!

[Joel]

So I was able to find Publication 15-T here:
https://www.irs.gov/pub/irs-pdf/p15t.pdf

The Wage Bracket Method Tables for Manual Payroll Systems with Forms W-4 From 2020 or Later on Page 7 was exactly what I needed. I can confirm that the paycheck city calculator was in fact correct and should have resulted in $0 withholding from this paycheck since we had listed an amount in Step 3 that was enough to bring it 0. I've added an additional amount to step 4b for good measure to hopefully make sure it gets to 0.

Ironically, this is a large employer that uses ADP... so it's most likely a problem between the data transmission between their online portal that accepts these W4 changes and the actual calculation engine that ADP is using to determine everything.

We have also reached out to their HR to hopefully confirm it gets fixed before the next paycheck.

[MDM]

Perhaps put something like $100,000 on line 3.  Unless she is highly compensated that ought to do it.

[BrightFIRE]

The IRS has vastly improved their withholding calculator. https://www.irs.gov/individuals/tax-withholding-estimator. It tells you how much you will get back and then has a slider for how much you want to get back, all the way to zero. Then it pops out a number to put on the form.

I used it and then looked at the PDF it offers to generate at the end to understand how to fill out my online W4 with ADP - my issue was not understanding where to put the number just from reading the form.