[OSSSA218] More 2020 W-4 follow up

[Jason Stanley]

Thank you everyone that has sent in questions, I have determined that my first two emails had parts that were not clear. I hope this corrects any concerns.

The IRS has changed their W-4 withholding form starting Jan 1 2020, therefore Oregon has to make changes to the process for the W-4. Below are the changes that people need to know.

*      Employees need to fill out an Oregon Form OR-W-4 for changes to Oregon withholding after 1/1/2020. The default withholding rate of 8 percent will be required in certain situations when a taxpayer provides their employer a Federal Form W-4 after 1/1/2020 and does not have an Oregon Form OR-W-4 on file.
*      Withholding exemption claim expires February 15 of the year following the exemption election and the individual must provide a new exemption certificate to claim an exemption from withholding for any subsequent tax year.
*      Please see ORS 150-316-0234, 150-316-0237 and 150-316-0257 if you want to see the rules.

Question: Do you need to have all employee's complete a new W-4 for 2020 for the Fed's and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Oregon.
Answer: No, the Fed's and Oregon are not requiring current employee's happy with their withholding to complete a new form. In 2020 current employee that change their Federal withholding(or a new employee) will use the Federal 2020 for those people they need to have Oregon W-4 on file (OR W-4 2019/2020).

Question: When do we need to set someone to the default 8 % withholding for Oregon.
Answer: When a current employee or new employee turns in the Federal W-4 for 2020 to change their Federal Withholding they must have a Oregon 2019/2020 W-4 on file. If they don't you need to set their withholding at 8 %.

Example: If employee A comes to you and says I need to update my Federal withholding, you need to give them the 2020 Federal W-4 and 2020 Oregon W-4. Employee A does not turn in the 2020 Oregon W-4 but only gives you the 2020 Federal W-4. You look and see that employee A does not have an Oregon 2019 W-4 on file. This is where you will default to 8 % for OR State withholding.

Question: Withholding exemption claims expire February 15 of the following year. Does that mean everyone has to complete a new W-4 every year.
Answer: No, Not everyone will have to complete a new form every year. Only those that complete a W-4 and claim exempt from withholding.

Example: Employee H completed a Oregon 2019 W-4 and claimed exempt from Oregon withholding. Employee H will need to complete a 2020 W-4 for Oregon because the exemption only lasts for a year.

If you have any questions please email chris.cox at oregon.gov<mailto:chris.cox at oregon.gov> or call 503-509-5188.
Thank you Chris Cox.

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Chris Cox
Payroll & Withholding
Outreach Coordinator
Oregon Department of Revenue
503-509-5188

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