Federal Income Tax Withholding

Federal tax withholding tables have changed for 2021.

The IRS has released the 2020 Publication 15 (pdf), Circular E, Employer's Tax Guide and the 2020 Publication 15-T (pdf), Federal Income Tax Withholding Methods.

Publication 15-T provides worksheets and tables to figure federal income tax withholding for Forms W-4 from 2019 or earlier and Forms W-4 from 2020 or later.

Starting in 2020, the formulas and tables used in computing federal income tax withholding are moved from Publication 15 to the new Publication 15-T. Publication 15-T is designed to work with the 2020 Form W-4 (pdf) that was significantly modified to conform to changes under the Tax Cuts and Jobs Act, in particular, the elimination of personal allowances through 2025.

The Internal Revenue Service has launched a new and improved Tax Withholding Estimator, designed to help workers target the refund they want by having the right amount of federal income tax taken out of their pay.

The IRS urges everyone to see if they need to adjust their withholding by using the Tax Withholding Estimator to perform a Paycheck Checkup. If an adjustment is needed, the Tax Withholding Estimator gives specific recommendations on how to fill out their employer’s online Form W-4 or provides the PDF form with key parts filled out.

Commonwealth of Massachusetts Tax Withholding

Information for Massachusetts M-4 Form can be found on the Commonwealth of Massachusetts website. If the allowable Massachusetts withholding exemptions are the same as being claimed for federal income tax purposes, the employee should complete Form W-4 only.

The Massachusetts Department of Revenue has not issued new income tax withholding tables for 2021 (Circular M). The Commonwealth of Massachusetts has not updated its withholding tax rate for 2021. It was 5.00% for 2020.