W-4 Employee’s Withholding Certificate and Federal Income Tax Withholding for 2020

[former_member87421]

New updates+++

July 7th: Section 'In PA30 - Withholding Info W4/W5 US (0210) infotype' has been updated:

• Marital Status

 

SAP has delivered updates to address to relevant technical changes to prepare for the new W-4 form model for year 2020. The aim of this document is to provide informational implementation that needs to be performed in SAP side for activating the new/changed functionality supported by SAP.

 

W-4 business background/impact

Affects payroll processing from the first pay period of year 2020. Changes will impact Master Data, Tax Computation, BSI Interface and related Employee Self Services.

 

What You Need to Know About the New Federal Form W-4

In September 2018, the IRS announced that it would delay the Form W-4 revisions until January 1, 2020. The 2020 version is expected to fully reflect tax law changes made by the Tax Cuts and Jobs Act (TCJA) and help employees improve the accuracy of their federal income tax withholding. With that, you should keep in mind that:

 

• The new form includes three filing statuses (single or married filing separately; married filing jointly or qualifying widow/-er; and head of household).

2019 Version



 

2020 Version



 

• Added the Step 2 for people with Multiple Jobs or whose Spouse Works

 

• “Total number of allowances”, line 5, replaced by Step 3 – Claim Dependents

 

• Added the Step 4 – Other adjustments, with 3 additional fields: and other anticipated tax credits (such as education tax credits and the foreign tax credit), and other adjustments to income that will either increase or decrease withholding.

 

• The IRS provides instructions in the 2020 Publication 15-T, Federal Income Tax Withholding Methods,  on the additional amounts that should be added to wages to determine withholding for nonresident aliens

What You Need to Know About the New Federal Form W-4 in SAP system

• Employees who have submitted a Form W-4 in any year before 2020 will not be required to submit a new form merely because of the redesign.

• New employees who fail to submit a Form W-4 are treated as a single filer with no other adjustments.


• If an employee only completes Step 1 (Filing Status) and signs the form, withholding will be computed based on the employee’s filing status’s standard deduction and tax rates, with no other adjustments.


• The 2020 withholding have been revised to accommodate both employees who have submitted a Form W-4 in any year before 2020 and employees who have submitted a 2020 Form W-4.


• Infotype 161 – IRS Limits reflects the IRS Lock-in letters. At the time of writing this post, the Lock-in letter still didn’t have a new version. However, we have updated Infotype 0161 to handle the Lock-In letters for FED in 2020 through SAP Note 2880846 – TAX: Lock-in letters not overriding New W-4. 

 

Section 1: Major changes to SAP System

With W-4 Tax Filing in 2020, SAP has adapted its interface, as follows:

 

In PA30 - Withholding Info W4/W5 US (0210) infotype

 

Previous



 

New

 



 

The Marital Status values effective 01/01/2020 are:

• Single (01)


• Married Filing Separately (03)


• Married Filing Jointly (04)


• Head of Household or family (06)


• Widow(er) (08)

*These statuses must be maintained in T5UTK. For more information, you can refer to SAP Note 2870071 - TAX: Table T5UTK entries for W-4 for year 2020.

For records beginning before 2020, filing status 02 (Married) should still be available. Check if the entry for 02 is still valid in T5UTK.

The following fields will be displayed in the infotype for records with begin date (BEGDA) greater or equal to 01.01.2020:

• Use Higher Withholding Rates Schedule (P0210-MULT_JOBS_IND)


• Total credits for dependents (P0210-DEPS_TOTAL_AMT)


• Other Income (P0210-OTHER_INC_AMT)


• Additional deductions (P0210-DEDUCT_AMT)

 

In Employee Self-Services (ESS)

Previous



Currently , in the ESS application for Form W-4 any change made to the record is effective the current date only and cannot be in the future.

New



In the ESS, for the new form W-4 for 2020, employees can submit a new W-4 to the employer using the first pay period of 2020. As the first pay period of 2020 can begin in 2019 (with a payment data of 01 Jan 2020), the previous solution prevented an employee from submitting a new W-4 via ESS until after payroll has been processed for the first pay period of 2020.

SAP is working on an enhancement to enable employees to set the begin date of the record to be editable (in the future) by which an employee can determine the withholding certificate to use in the upcoming pay period or later.

Note: This enhancement is planned to be released on December 20th.

 

Important SAP Notes:

2760918 BSI: TaxFactory 11.0 – DDIC Changes
2763228 BSI: TaxFactory 11.0 – Function Modules Changes
2770832 BSI: TaxFactory 11.0 – General Technical Changes

2780204 BSI: TaxFactory 11.0 – Changes required for TaxFactory SaaS

2790902 BSI: TaxFactory 11.0 – Payroll Driver Changes
2845130 Prerequisite objects for SAP Note 2845128
2853402 Correction of report NOTE_2845130

 

Manual steps – to run the report NOTE_2845130

2845128 TAX: W-4 Form for Year 2020 – Master Data (SAP_HR)
2850174 TAX: W-4 Form for Year 2020 – Master Data (EA-HR)

Manual steps – Run the report NOTE_2850174 in your system

2845529 TAX: W-4 Form for Year 2020 – ABAP Webdynpro ESS and Renewal (EA-HR)
2870221 Post-implementation objects for SAP Note 2845529
2863489 Prerequisite objects for SAP Note 2855896
2855896 TAX: W-4 Form for Year 2020

Manual Activities –
Manual Post Instructions for SAP Note 2855896.pdf,
Run the report NOTE_2863489_DDIC,
Run the report NOTE_2863489

2870177 TAX: W-4 2020 – Not reading infotype 0210 for periods in 2019 with checkdate in 2020
2871658 TAX: Missing field labels for ESS W-4 2020.
2872242 TAX: Exempt indicator does not change fields for W-4 for year 2020

2875533 Delimited Filing Status Description resulting in validation error in Decoupling Framework in specific situations

2873856 New W-4 fields not disabled in PA30/PA40 for Exempt employees after applying SAP note 2872242

2876794 TAX: NWI parameter misplaced in BSI Interface for TaxFactory 10.0

This SAP Note is only relevant for the Payroll log, and does NOT affect tax calculation.

2880390 W-4 ESS: Changing field property and usage of BAdI HRXSS_PER_BEGDA

IMPORTANT -> these notes contains a lot of manual steps, that must be implemented.
– There is a minimum Support Package requirement to these notes to be implemented.

 

Improvement for ESS ABAP WebDynpro application.

2876047 Prerequisite objects for SAP Note 2868576
2868576 – W-4 ESS – Allowing the configuration of begin date in standard ESS
2878349 – PAYSLIP: W-4 Form for 2020 – Fields enablement for PE51

2881474 – PAYSLIP: W-4 Form for 2020 – Fields enablement for PE51 – additional functionalities

2881471 – Prerequisite objects for SAP Note 2880845
2880845 – Tax Infotype Summary Report for W-4 2020

2884856 – Prerequisite objects for SAP Note 2880846
2880846 – TAX: Lock-in letters not overriding New W-4

With this enhancement, users will be able to set the start date of the records created in their ESS. More information can be found in the notes.

2888094 – TAX: Lock-in letters override for W-4 exempt

2881773 – W-4 ESS: ESS Web Dynpro enhancements

If you are using Tax Factory 10.0 SaaS and is facing issues with results in tax withholdings, please verify if your system is updated with the SP 72 (or the corresponding CLC). You must have the contents of the SAP Note 2780204, which is only delivered via SP.

 

Phase I State Notes:

2895426 – Prerequisite objects for SAP Note 2878657
2878657 – 2020 State Withholding Tax Calculation – Based on the State (or State-equivalent) Withholding Certificate (SAP_HR) – Phase I
2891794 – State Withholding Tax Calculation – Based on the State (or State-equivalent) Withholding Certificate (EA-HR) – Phase I

 

Frequently Asked Questions - FAQ

 

1- Is W-4P for Pensioners supported? Is there an updated version for W-4p?

The Infotype 0210 is designed to support the regular W-4 form only.

 

2- When you change the start date to 2020, the new fields appear in PA30, but in ESS, they are not available. Is this able to create new record W4 for 2020 in ESS with start date of 01/01/2020?

Refer to Section 1: Major changes to SAP System -> In Employee Self-Services (ESS) section.

 

3- Regarding the SAP Note 2845529 for ESS W-4 Form for 2020, how are we able to test this to see the new fields since it seems to be using the current date, which is prior to 2020?

Refer to Section 1: Major changes to SAP System -> In Employee Self-Services (ESS) section.

 

4- Will the changes to the ESS W-4 also be applied to the UI5/Fiori versions?

No, Fiori for W-4 is not planned to be delivered.

 

5- I was able to display the new form in ESS only after I saved IT0210 with an effective date of 1/1/2020 for a specific test employee, but we should not have to create new records in order for them just to show up in ESS.

Refer to Section 1: Major changes to SAP System -> In Employee Self-Services (ESS) section.

 

6- How to remove the alphanumeric string displayed before the Tax Authority? 

If you are facing this issue, please refer to SAP Note 2871658 TAX: Missing field labels for ESS

W-4 2020.

 

7- Are these changes applied to customer-specific state forms?

Changes will be reflected only to Federal.

 

8-  How does SAP deliver customizing entries for filing status?

Filing status in T5UTK table must be maintained with your own entries in the system. The SAP Note 2870071-TAX: Filing Status customizing for W-4 for year 2020 serves only as a guide for you to create your own entries, and is valid only for federal entries. So you can change it accordingly with your business needs.

 

9- How is marital status 2 (Married) configured as of 2020 in SAP system?

Employees are not required to submit a W-4 for 2020. For employees who do not submit a new W-4 for 2020, the record for 2019 is still valid, and the marital status 02 is passed to BSI. The same happens for all states.

For employees who submit W-4 for 2020, value 02 is not allowed anymore. Then, records starting from 01.01.2020 must either use 03 or 04 for married status.

 

10- Where can I find the checkbox for W-4 step 2C: Multiple Jobs or Spouse Works in the IT0210?

This is the field MULT_JOBS_IND with the description “Use Higher Withholding Rates Schedule” in the Status panel.

The details are in the F1 help.

This field indicates the following conditions:

• An employee who holds only two jobs or;

• If married, both employee and spouse work are taken into account as two jobs in total. The correct amount of withholding depends on income earned from both jobs. For this case, if employee and spouse have similar income, the withholding will be most accurate if the adjustments are made for the highest paying job.

Use: This checkbox is used if there are only two jobs total.

This option is accurate for jobs with similar pay. Otherwise, more tax than necessary may be withheld.

 

11- Where can I find the checkbox for W-4 step 3: Claim Dependents in the IT0210?

This is the field DEPS_TOTAL_AMT with the description “W-4: Total credits for dependents” in the Exemptions panel.

The details are in the F1 help and Indicates the total amount based on the number of dependents employee is claiming.

 

12- In 2020 W-4 form, there is no longer a checkbox concerning last name differs from that shown on the SS card. Will this change be included in the system?

While this field is not part of the current W-4 form, it did not require SAP to prevent employers from capturing this additional data point. Therefore, this field does not affect payroll computations or subsequent processes.

 

References

https://blogs.sap.com/2019/12/07/w-4-form-for-year-2020/comment-page-1/#comment-485450

[archana_sharma]

Hi SAP,

How is SAP Planning to support new W4P and W4R from year 2022 onwards for pensioners

As this is legal compliance, requesting response from SAP

We run payroll for Pensioners in SAP ECC environment

Thanks

Archana

 

 

 

 

[ViswaRamamurthy]

Hello Archana,

W-4P and W-4R have not been in scope of the SAP solution in the past and is not on our roadmap for the near future. You can refer to SAP Road Map Explorer for the upcoming features and functionalities.

~ Vishwa

 

[Bhaskar_Tripath]

Hi Virginia,

 

I am a little confused by note 3098182 - My Employee Withholding Certificates: Additional changes Fiori W4.

It makes mention of "My Employee Withholding Certificates Fiori application", but based on your response to other comments, there is no fiori application planned. So, is the fiori application referred to in the note Webdynpro app?

 

BR,

Bhaskar

[former_member87421]

Hi bhaskar001 ,

Thanks for raising this question. This SAP Note is a prerequisite for a planned future delivery. A sneak preview has been shared in the ASUG Webcast “HCM U.S. Payroll and Tax Reporting 2021 Year End Update” which was conducted on October 7, 2021.
The slide deck of the webcast is also attached to SAP Note 3082167 (U.S.TaxReporterYearEnd2021Announcement). Attachment Part 1, slides 10-13 refer to this planned future delivery.

Best regards,

Virginia

[KG11]

Colorado put out changes for their W4 and no longer follow Federal.  One of the changes is adding a new field called "Annual Withholding Allowance".  Do we know when SAP is planning to release these updates for IT210 and ESS?

Thanks,

Kyle

[evelyn_barbosa]

Hi virginia.soares

We are encountering an issue in ESS after the application of Support Stacks for this year.  We are currently in SAP_HR SAPKE604G9 and SAP_HRCUS 604H0.

The issue is happening when and employee is trying to update their IT0210 but they have an existing record from 2007.  When selecting the Filling Status of 04 Married F Joint and trying to save the record we get a message : "Filling Status 04 not valid for Withholding Format"

We have had changes to IT0210 records on other employees through ESS without issues since the update to the system but their prior existing records were  more recent than 2007.

Thank you so much for any guidance or assistance in this matter.

Evelyn Barbosa

 

 

 

[cesardaudt]

Hi Evelyn,

 

Please take into account that the valid Filling status values might have changed from the old format to the new one. If you are editing an IT0210 record in a date where the new format applies, the business rule from this new format will be used.

Remember that one is allowed to have a record in IT0210 using the old format if, and only if, there is no change or update due when the new format is valid.

Nevertheless, should you have any comment, my suggestion would be to follow up with an incident, so we can check your scenario with more details in your system, ok?

 

Thanks for your collaboration,

César Daudt

GS HCM US Product Owner

[evelyn_barbosa]

Hi cesar.daudt ,

I researching SAP notes I came across 3124528 which mentions another note 3119877 referencing W4 Legacy records but I was unable to access it since it is apparently being updated.  The issue that we are encountering appears to be related to employees who have not made changes to their W4 record since before 2020 and are now trying to update/change their filling status.  Could this note 3119877 be attempting to address that?  I was in the process of opening an incident but wanted to check on this first.

Thank you so much for your feedback.

 

 

 

 

[graziela]

Hello Evelyn,

Developers are working to release the note.
As per your description of the case, note 3119877 seems to be relevant to it.

Could you please wait until the note be released, this should be available soon, as the status is now for checking.

Kind regards,
Graziela

[evelyn_barbosa]

Good morning graziela.dondoni::

 

Following up with this issue I see the note have been released but in looking at the software component that it impacts it is for versions 605 and above, we are currently on SAP-HRCUS 604H0, would this not address this issue for us as well?

 

Thank you

 

Evelyn Campos

[pkrishnateja]

Hello Stanette,

 

we have the same issue in our systems now. Can you please share the resolution. Thanks.

 

Regards,

Krishna Teja Peddada

[SRB86]

Krishna,

Using SE61 for Document below, confirm the text is correctly stated or create it.  I believe this is the only part we had to change for FIORI W4 to present the box with usable text.

P10_W4_FED_DOCU_MULT_JOB_TXT

Good luck!

Stanette

[pkrishnateja]

Hello Stanette,

Thankkyou for the prompt reply.

that is exactly i am looking at. the text seems maintained correctly in SE61 (attached SS).

but the std Function Module in the WebDynpro component is fetching 5 lines of code from the table DOKTL (attached SS).

I tried to delete the text, hoping it will delete the 5 lines and created it again, hoping it will create a single entry in the DOKTL table with just the text needed.

Thanks,

Krishna Teja Peddada

[SRB86]

Krishna,

When I look our table DOKTL, we only show a single line for the equivalent of your line 000004.

I don't recall we made any further changes and the transport doesn't show any.  I do believe we had all the W4 notes in place.

Regards,

Stanette

[nnichols]

Hello, Graziela.

We have applied note 3119877 but we are having issues with records coming from ESS.

The note indicates "any record created/modified on ESS will follow the Redesigned format, as the ESS logic works on current date".

Records modified for 2022 via the ESS are accepting retired statuses, i.e. 02-Married, and saving the form on IT0210 as the original.  Incorrect taxes are being calculated in these instances.

Is there a fix for this?

Thank you,

Nancy

[Maggie3654]

Was there a reply or solution for this issues?  We are also having an issue with records being modified with a filing status of 02, we have also been getting an error but I see that Note 3119877 appears to take care of that issue.

Regards,

Margaret

[ChandraV]

Hello Team, have a question on the ESS W4. We are on WebDynpro Abap ESS screens. I'm trying to enable W4 in ESS for the state of Arkansas.  Arkansas allows an alternate formula for withholding on their W4. We have two withholding formulas for Arkansas - 01 (default) and 02 (reduced). I'm trying to enable this in ESS. However, the alternate formula field (field name: FRMNR) in the ESS shows up but as non-editable (FRMNR is set up as "can be editable" in the config) and the drop down also doesnt work.

We have the alternate formula field (FRMNR) thing for the state of Arizona and that works fine. The configuration set up for ESS W4 for Arkansas is same as for Arizona but the "alternate" formula field doesnt work for Arkansas (cannot enter a value in ESS and the drop down doesnt have any value). I'm puzzled that the field wouldnt work for one state but work fine for another.

Any thoughts, ideas? anything I'm missing.

We are on 6.08 EhP8 for HR.

Thanks

Chandra