Federal and state Form W-4 compliance in 2021

Local contact

Debera Salam

24 Feb 2021 PDF
Subject Tax

This publication offers an explanation of the employer requirements that apply to the federal and state Form W-4 for 2021.

The Tax Cuts and Jobs Act (TCJA) made extensive changes to the federal income tax withholding calculations. Accordingly, effective in 2020, the IRS extensively modified the Form W-4 to accommodate the TCJA changes and to improve the accuracy of taxpayer requests for income tax withholding.

In this special report, we explain the changes in the 2021 Form W-4 and the related federal income tax withholding calculations, and recap how the state rules governing withholding certificates have responded to the transformation in the federal withholding landscape.

Included in this report are:

  • How the TCJA forced changes to the Form W-4
  • 2021 Form W-4 frequently asked questions
  • New income tax withholding methods 
  • Compliance with lock-in letters
  • Special instructions for US nonresident aliens
  • IRS Form W-4 proposed regulations
  • State Form W-4 compliance in 2021 
  • Form W-4 top 10 tips
  • State Form W-4 survey for 2021
  • State Form W-4 heat map for 2021