7 Reasons Staff May Be Providing a New W-4 in 2020: What Nonprofits and Churches Need to Know

Ministers, Officers, and Staff may need to provide their nonprofit or church employer with an updated W-4 in order to change their withholding elections this year. According to proposed IRS regulations recently published on the Federal Register, these church and nonprofit employees must complete a new or updated W-4, if:

1. their filing status changes.If an employee’s tax filing status was originally “married filing jointly” and changes to “single,” or from “head of household” to “single,” or any combination thereof, this would qualify as a change of status. These also include “married filing separately.” For each case, a new W-4 would need to be provided to their church (or nonprofit) employer.
2. they start a second job.If an employee starts a second job and provides a W-4 selecting higher withholding rate tables, the employee must also give an updated W-4 to the original employer in order to reflect the change. This is also true for married employees where both spouses work, and they expect to file jointly with their spouse.
3. they have multiple jobs and receive a large raise. If the employee has multiple W-4s (or their spouse also works), had completed at least one of those forms using the multiple jobs section, and expects to receive an annual raise of at least $10,000, the employee must provide a new W-4 updating the multiple jobs section to the other employer.
4. their child(ren) can no longer be claimed for the tax credit. If the employee expects the number of qualifying children to change and had claimed the child tax credit for those that will soon be adults, the employee must provide a new W-4.
5. other tax credits can’t be claimed.If the tax credits the employee can no longer claim exceed $500, that employee must provide a new W-4.
6. their deductions change. If an employee expects the itemized deductions they claim on their taxes to decrease by more than $2,300, the employee must provide a new W-4.
7. they are no longer tax exempt. If an employee now expects to pay taxes and can no longer reasonably expect to claim exemption, the employee should provide a new W-4.

The IRS Tax Withholding Estimator is available to help nonprofit or church employees estimate withholding elections, or find Frequently Asked Questions on the newly redesigned Form W-4 to help fill the form out correctly.

Nonprofits and Churches can also download a fillable PDF of Form W-4.