Dynamics GP W-4 form changes 2020

December 17 | By Tracey Brinkman


Microsoft Dynamics GP W-4 form changes 2020. Changes for this form are included in the 2019 Year End Update released on 11/18/2019.

As part of the 2019 Year-End process, make sure and install the 2019 Payroll year end update and the  2020 payroll tax table (releasing mid December 2019). Preferable both by 1/1/2020 so you have the “new” W4 fields and the tax tables that go with those new fields.
Note: They do not need to be installed at the exact same time.

The goal with the changes to the W4 and tax tables is that all the taxes will calculate correctly and no employee will ever owe money at the end of the year or get a refund. The “intent” of the new W4 is to make the taxes more accurate and simplify the W-4 process for an employee. 

Step 1:  Enter Personal Information

Cards | Payroll |Tax

Notes from Microsoft: Notice that Exempt is no longer an option on the form, that is by design.  I think the instructions state to write EXEMPT across the form.  There is still an Exempt filing status option in Dynamics GP for federal withheld.  You will see this under (Cards | Payroll | Tax) and the filing status is part of our tax tables.  We have also added a new filing status to our tax tables for Head of Household

Step 2:  Multiple Jobs or Spouse Works

Dynamics GP W-4 form 2020: Single and Singe Higher

You will not find a checkbox for this under (Cards | Payroll | Tax), instead it will be handled through the tax table.  Review the instructions and 15-T, you will see for example Single has a Single tax table (STANDARD).

Once you install the 2020 tax table you will see that Dynamics GP has filing status options for Single and Single, Higher

If an employee marks the box in Step 2, you should set the filing status to Single, Higher under (Cards | Payroll | Tax)
This would be the same process for Married and Head of Household options.

Dynamics GP W-4 form 2020: Single and Single Higher
Dynamics GP W-4 form 2020: Single and Single Higher

**All employees will “remain” unchanged when you install either the 2020 tax table update or 2019 year-end update, the employee record will not change, untill they have completed a new 2020 W-4.**

Example: An existing employee of your company, filing Single today with 10 exemptions. Their record would stay the same for the 2020 payroll year until a new W-4 has been filled out. Employees are not required to fill out a new W-4, only if your company wants them too.

Employee Self Service

If you are a customer that uses the Employee Self Service W-4 product, the form has the new checkbox and if marked will choose the new filing status once it has gone through the approval process.

Step 3:  Claim Dependents (new field in Dynamics GP)

Note: **This new field was not added to Integration Manager or eConnect**

If you just install the 2020 payroll tax update and do not install the 2019 year-end update, then you will not have the new field called Dependent Claim Amt. (Cards | Payroll | Tax).  The new field on the W-4 correlates to section Step 3 Claim Dependents on the W-4 form.
Payroll will still run without causing errors, however you will not be able to “reduce” your YTD tax withheld by this field if it is not there.
How this new field figures into our tax calculation process is the following:

As stated in the article in the above link, in Dynamics GP all calculations are annualized.  Once we get down to the part of the calculation and we have figured out Terry’s yearly withheld for this payroll week is $6,462.50.

If it is a weekly payroll, divide that by 52 which would be 124.28 federal tax withheld per week.

With this new field, lets say I have:

$1,500 in the field Dependent Claim Amt (500 * 3)

Then the calculation would be $6,462.50 – $1,500 = $4,962.50 / 52 = $95.43 Federal tax withheld per week.

Dynamics GP W-4 form: Exemptions, Dependents, Additional Withholding.
Dynamics GP W-4 form 2020: Dependents and Exemptions

Step 4:  Other Adjustments (Optional)

For step 4a-other income, there is no field for Dynamics GP to enter Extra Income to calculate taxes on.  If an employee has other income, use the IRS Tax Withholding Estimator to figure out any additional tax that is owed. Put that in the Additional Withholding field to take out “extra” tax each pay period, under (Cards | Payroll | Tax).

4b – there is no field in Dynamics GP for this, but if you want to reduce your withholding, you can enter a “negative” amount in the Additional Withholding field to do this.

4c – This is an existing field that we have today under (Cards| Payroll| Tax) for Additional Withholding amount per pay period.  This amount will be added to the tax withheld already calculated by the system during the payroll process.

Step 5:  Sign and Date

Dynamics GP W-4 form: Employee Exemptions

Dynamics GP W-4 form changes 2020

Dynamics GP W-4 form 2020: Employee Exemptions

On the 2020 W-4 there are no Exemptions. However, if you read the instructions from the 15-T it does state built into the tables based on the filing status. You are allowed exemptions, but they enforce what the exemption will be.

Notes Payroll Admin

We have made notes to the Payroll Admin for what to enter based on the filing status the employee selected.  The system WILL NOT auto default the exemptions for the user.

The example above shows Married, so I should put a 3 for the Exemptions.

If an employee fills out a 2020 W-4, we should never see 10 exemptions or 5 as an example, for the 2020 year only 3, 2, or 0 are options.

Employee Self-Service W-4

If you are using the Employee Self-Service, the W-4 has changed to the following format:

The top section will show what the employee has today under (Cards | Payroll |Tax).

In the example below, changing the filing status from Married Higher withholding to Head of Household higher withholding.
Additional tax withheld from $61.00 to $200.00
Dependent Claim Amount from $51.00 to $100.00

Once the employee submits the change and it goes through the Workflow Approval process it will update the (Cards | Payroll | Tax) window and keep a history of the change.

Dynamics GP W-4 form changes 2020

Dynamics GP W-4 form 2020

Good luck with the new Dynamics GP W-4 form changes 2020!

Be sure to refer to the 2019 Year-End Blog Schedule to review current and upcoming blog posts and other helpful resource links related to Year-End Closing for Dynamics GP.

Important Links for you to refer to regarding W-4 for 2020:

W-4 form for 2020
IRS FAQ on W-4 form for 2020
IRS Tax Withholding Estimator
15-T (formally referred to as the Circular E )

Data for this article taken from this article by Terry Heley: https://community.dynamics.com/gp/b/dynamicsgp/posts/new-2020-payroll-w-4-how-does-it-work-in-microsoft-dynamics-gp

For any iSolutions clients, please contact us if you have questions regarding Dynamics GP W-4 form changes 2020. Email:support@isolutionspartners.com

Review our previous articles at: https://www.isolutionspartners.com/articles/