My understanding is that if you click the box to Use W-4 amounts, then it looks to the 3 lines below it where you would enter the amounts from the new version of the W4 they filled out, but if you don't click the box, it uses the old way based on the filing status and the exemptions box.

So if I have nothing in the 3 lines below, wouldn't you expect the withholding to be the same whether I have the box marked or not? I'm just confused.

So if I have nothing in the 3 lines below, wouldn't you expect the withholding to be the same whether I have the box marked or not? I'm just confused.

Hi Amorton,

For employees that fill out a W-4 from from 2020 and beyond, there is a seperate set of tax tables that are used. The Dependent, Other Income, and Deduction amounts apply to that table to reduce or increase the amount of tax withheld. If Use W-4 amounts is checks, the system will use that table.

If that box is not checked, there is another tax table used. The tax calculated from that table changes based on the number of exemptions entered.

And yes, if you check the box and enter no amounts or uncheck the box and enter no exemptions, you will get different tax amounts. The Use W-4 Amounts option is typically lower, where the tax will be lower check by check, however the employee will get a smaller refund (or even owe) at the end of the year.

The easiest way to see this is to go to Payroll, Tools, Tax Calculator and play with toggling the settings to see how it affects the tax amount. 

Ok thank you. That helps me a lot!