We know you’ve got a lot on your plate right now, and we want to help make compliance easy. That’s why we’re writing to notify you that the New Jersey Division of Taxation has released their updated New Jersey Income Tax Withholding Instruction (NJ-WT). ADP® has already made system modifications to comply with these changes for payrolls processed on March 12, 2020, and beyond.
Read on to find out what you need to know about the changes.
Details
According to the updated instructions, for tax years 2020 and later, you must give Form NJ-W4 to your employees to fill out and return to you.
The federal Form W-4 can no longer be used to accurately withhold New Jersey income tax, as it doesn’t allow employees to claim personal exemptions for themselves, their spouses, or dependents.
New Jersey also advised the following for withholding tax:
· If an employee submits a 2020 federal Form W-4 and does not submit a Form NJ-W4, use the marital status on the 2020 federal Form W-4 with zero allowances.
· If an employee does not submit a 2020 federal Form W-4 or a Form NJ-W4, withhold using Single (Rate A Table) with zero allowances.
· If an employee does not submit a 2020 federal Form W-4 or a Form NJ-W4, but they have federal elections from a pre-2020 federal Form W-4 on file, default to the federal elections on file.
· If an employee submits a federal Form W-4 and checks “Head of Household” but does not complete a Form NJ-W4, withhold using “Rate B” Table with zero allowances.
If you have any questions, please contact your dedicated Service Team.