Form W-4P, Withholding Certificate for Periodic Pension or Annuity Payments (previously titled Withholding Certificate for Pension or Annuity Payments), was redesigned for 2022. The new Form W-4P is now used only to make withholding elections for periodic pension or annuity payments. Previously, Form W-4P was also used to make withholding elections for nonperiodic payments and eligible rollover distributions. Starting in 2022, withholding elections for nonperiodic payments and eligible rollover distributions may be made on new Form W-4R, Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions. Since the redesigned Form W-4P and the new Form W-4R have been released, Treasury and the IRS have received several questions concerning electronic systems set up as substitutes to official Forms W-4P and W-4R, paper substitutes to Forms W-4P and W-4R, and other issues. The following information addresses substitute forms for Forms W-4P and W-4R. Applicable form instructions and publications will be updated with this information for 2023. Electronic Substitutes to Paper Forms W-4P and W-4R For 2022, general guidelines for electronic substitutes to paper Forms W-4P and W-4R can be found in the 2022 Publication 15-A, Employer's Supplemental Tax Guide. Additional information concerning electronic substitutes to paper Forms W-4P can be found in the 2022 Publication 15‑T, Federal Income Tax Withholding Methods. Requiring Social Security number and other personal information already in payer's possession Due to data privacy and cyber security concerns, some payers have asked whether electronic substitutes to Forms W-4P and W-4R must require payees to provide Social Security numbers and other personal information that is already in the payer's possession. If a payer electronically stores payee personal information, including name, address, and Social Security number, and accepts withholding elections through an account specifically tied to the payee, the payer need not require the payee to submit this personal information again when completing an electronic substitute to Forms W-4P and W-4R as long as the account where the election is being made is directly or indirectly linked to the electronically stored personal information. References to page numbers Some payers have asked whether substitutes to the paper form must replicate references on the face of the form to "page 2" or "page 3" of the Form W-4P when those references are not applicable. References to pages 2 and 3, when not applicable to the substitute form, should be replaced by appropriate references. For example, an electronic substitute form that links directly to the deductions worksheet should not reference "page 3" but should provide a link to the deductions worksheet. As provided in Publication 15-A, this administrative accommodation also applies to Form W-4R. Form W-4R Marginal Rate Tables The 2022 Publication 15-A provides that electronic substitutes for Form W-4R must exactly replicate the Marginal Rate Tables (inclusive of all related text above and within the tables) as they appear on the paper Form W-4R. Some payers have asked whether electronic substitutes to Form W-4R can provide a link to a new web page that provides the Marginal Rate Tables rather than providing the tables themselves. An electronic substitute to Form W-4R can provide a link to a web page with the Marginal Rate Tables, inclusive of all related text on the first page of the W-4R starting with the text "2022 Marginal Rate Tables", as well as the applicable Specific Instructions, starting with "Suggestion for determining withholding", rather than providing the tables (and related first page text) themselves, but the link must be immediately below line 2 on the electronic substitute form and be preceded by the following text: The link below will take you to the 20XX Marginal Rate Tables. You may use these tables to help you select the appropriate withholding rate for this payment or distribution. Instructions on how to best use them are included. Paper Substitute Forms to Forms W-4P and W-4R While the 2022 Publications 15-A and 15-T provide guidance concerning electronic substitutes to paper Forms W-4P and W-4R, they do not address substitute paper forms. Some payers have inquired about guidelines for paper substitutes to these forms. When providing paper substitute forms for Forms W-4P and W-4R, payers should generally follow the same guidelines that apply for electronic substitutes to Forms W-4P and W-4R, except where those guidelines apply only in the context of electronic substitutes (such as instructions concerning pop-ups and hoverboxes). In addition, paper substitute forms must include the applicable form's instructions and worksheets rather than providing a web address where the payee can find the applicable form on IRS.gov. Telephonic Submissions of Form W-4R Because Form W-4R is a new form, stakeholders have raised questions concerning whether telephonic submissions of Form W-4R are permissible. Payers may provide for telephonic submissions of Form W-4R. The IRS anticipates that it will provide guidance that one of the following three scripts be used for telephonic submissions of Form W-4R, depending on the situation of the payee. Other information in addition to one of the three statements below, to provide further explanation and context, may also be provided. For nonperiodic distributions to be made to payees within the United States and its possessions "The default withholding rate is 10%. You can choose to have a different rate – including any rate from zero to 100%. You can also go to Form W-4R, found online at [READ WEBSITE ADDRESS OF 2022 FORM W-4R], for further instructions and a rate table that helps you choose a rate that is appropriate for your tax situation." For nonperiodic distributions to be made to payees outside the United States and its possessions "The default withholding rate is 10%. You can choose to have a different rate, but you generally can't choose a rate of less than 10% for payments to be delivered outside the United States and its possessions. You can also go to Form W-4R, found online at [READ WEBSITE ADDRESS OF 2022 FORM W-4R], for further instructions and a rate table that helps you choose a rate that is appropriate for your tax situation." For eligible rollover distributions "The default withholding rate is 20%. You can choose a rate greater than 20%, but you may not choose a lower rate. You can also go to Form W-4R, found online at [READ WEBSITE ADDRESS OF 2022 FORM W-4R], for further instructions and a rate table that helps you choose a rate that is appropriate for your tax situation." Telephonic Submissions of Form W-4P The IRS intends to issue guidance concerning the telephonic submission of Form W-4P. However, payers who want to make programmatic changes concerning telephonic submissions of Form W-4P before the guidance is issued should use a script that includes all portions of the first page of the paper Form W-4P from steps 1c-4c, including the step titles and text between Steps 1 and 2, with the following exceptions: On Step 2, the script can stop right before "See page 2 for examples on how to complete Step 2" if, when asked, the payee indicates the step does not apply. On Step 3, the script can stop right before "If your total income will be $200,000 or less…" if, when asked, the payee indicates the step does not apply. Where the language on the first page of Form W-4P refers payees to later pages of the form, such as for more information on how to elect to have no federal income tax withheld, the telephonic script should provide the IRS web address of the online Form W-4P in addition to the referenced page numbers. Use of Substitute Paper and Electronic Forms W-4P and W-4R for 2023 Although the final redesigned Form W-4P and new Form W-4R are available for use in 2022, the IRS postponed the requirement to begin using the forms until January 1, 2023. For payers using electronic or paper substitutes for Forms W-4P and W-4R, substitute forms for the 2023 Form W-4P and 2023 Form W-4R incorporating all changes made to the 2023 versions of these forms and complying with the guidelines provided here and in the 2022 Publication 15-A and 2022 Publication 15-T must be in use by the later of January 1, 2023, or 30 days after the IRS releases the final versions of the 2023 Form W-4P and 2023 Form W-4R.
