What Is a W-4 Form & How to Fill It Out in 2026

What Is a W-4 Form?

Form W-4, the Employee’s Withholding Certificate, is the IRS form employees use to tell you how much federal income tax to withhold from their pay. It captures filing status, dependents, other income, and deductions. You use that information with IRS withholding tables to calculate each paycheck’s federal income tax.

Form W-4 doesn’t affect Social Security or Medicare taxes, which are withheld at set rates. Employees complete a W-4 when they’re hired and should submit a new one when their tax situation changes.

2026 W-4 Changes

The most significant change to Form W-4 came in 2020, when the IRS eliminated withholding allowances and redesigned the form around a five-step process. The 2026 form builds on that redesign with more substantial updates than in recent years, largely to reflect new deductions under the One Big Beautiful Bill Act (OBBBA).

Here’s what’s new on the 2026 Form W-4:

• No Allowances: Federal withholding allowances were eliminated in 2020 and don’t appear on the 2026 form. Employees use the five-step process to account for credits, deductions, and other adjustments instead. State withholding is handled separately, and some states still use allowances on their own forms.
• Expanded Deductions Worksheet: The Step 4(b) Deductions Worksheet is now a full page with 15 lines. It incorporates the temporary OBBBA deductions directly, so employees can factor them into their withholding:
  • Qualified tips
  • Qualified overtime compensation
  • Passenger vehicle loan interest
  • Enhanced deduction for seniors age 65 and older
• New Exempt Checkbox: Employees who qualify for exemption from withholding now check a box after Step 4 instead of writing “Exempt” below Step 4(c).
• Updated Step Labels: Step 3 lines are now labeled (a) and (b), and Step 4 is no longer marked optional.
• Updated Standard Deduction Amounts: Standard deductions have increased for 2026. The new amounts for each filing status are:
  • Single and Married Filing Separately: $16,100
  • Married Filing Jointly: $32,200
  • Head of Household: $24,150
• Updated Multiple Jobs Worksheet: Tax tables in the Step 2 worksheet have been updated for 2026. Employees should complete it if they hold more than one job or are married filing jointly with a working spouse.
• Tax Withholding Estimator: The form’s instructions continue to encourage employees to use the IRS Tax Withholding Estimator for the most accurate withholding.

Temporary OBBBA Deductions

The OBBBA introduced several temporary deductions, including the “no tax on tips and overtime” provisions, that remain in effect through 2028. Employees can estimate them on the Step 4(b) Deductions Worksheet:

• Qualified Tips: Tipped workers can deduct up to $25,000 a year. The deduction begins to phase out above a modified adjusted gross income (MAGI) of $150,000 ($300,000 for joint filers).
• Qualified Overtime: Workers can deduct the premium portion of their overtime pay (the “half” in time-and-a-half), up to $12,500 for single filers and $25,000 for joint filers. The deduction begins to phase out above a MAGI of $150,000 ($300,000 for joint filers).
• Passenger Vehicle Loan Interest: Up to $10,000 a year in interest on a loan for a new, personal-use passenger vehicle can be deducted. The vehicle must have a gross vehicle weight rating under 14,000 pounds and final assembly in the U.S. The deduction begins to phase out above a MAGI of $100,000 ($200,000 for joint filers).
• Enhanced Senior Deduction: Individuals age 65 or older can deduct up to $6,000 ($12,000 for married couples filing jointly if both qualify), in addition to the standard or itemized deduction. The deduction begins to phase out above a MAGI of $75,000 ($150,000 for joint filers).

Looking Ahead to 2027

The IRS released a draft of the 2027 Form W-4 in July 2026. The draft keeps the same structure as the 2026 form, including the expanded Deductions Worksheet, and dollar amounts will be finalized when the IRS publishes the official form, expected in December. Employees don’t need to submit a new W-4 because a draft has been released.

Who Needs to Fill Out a W-4 Form?

All new employees are required to complete a federal W-4 form at the start of employment. Employees should also update their form at any point during the year if they have changes that would affect their tax withholding or liability. State withholding forms are filed separately.

Here is a list of scenarios that require W-4 filing or updating:

• The employee is new and just starting employment
• There's a change in filing status (e.g., an employee gets married, divorced, or becomes head of household)
• The number of dependents has changed, potentially affecting the child tax credit
• A spouse enters or leaves the workforce
• An individual takes on or stops multiple jobs
• An individual experiences significant increases or decreases in income from additional jobs or other sources
• An employee owes taxes or receives an unexpectedly large refund when filing their previous year's return

How To Fill Out a W-4 Form

Completing a W-4 form is a shared responsibility. Employees fill out most of the form, including their filing status, dependents, and any additional withholding, while employers must complete a short section and handle the form after it's submitted. Here's what each needs to know.

For Employees

If your employees are unfamiliar with the W-4 completion process, they may request assistance completing the form. While you should not provide tax advice or tell them what to claim on the form, you can help them understand what they need to do for each step. (Please note: nonresident aliens should see Notice 1392 before completing the W-4 form.)

Employees who previously used the “withholding allowances” method on older forms should fill out the following 5-step method instead. The steps are as follows:

Step 1: Enter Personal Information

This section asks employees to identify themselves (name, address, Social Security number, and how they plan to file – single, married filing jointly, etc.). It remains unchanged from previous W-4s.

Step 2: Multiple Jobs or Spouse Works

This step should be completed if the employee holds more than one job at a time or is married filing jointly and the spouse also works. If the employee holds two jobs and/or the spouse also works, the combined income could push them into a higher tax bracket. Without this step, the employer will withhold too little tax. Under-withholding can lead to surprise tax bills for the employee and payroll headaches for the employer.

Step 3: Review Dependent Tax Credits

Employees complete this step if their total income will be $200,000 or less ($400,000 or less if married filing jointly). It uses two lines to calculate dependent credits:

• Line (a): The number of qualifying children under age 17 multiplied by $2,200, the maximum Child Tax Credit (CTC) for 2026.
• Line (b): The number of other dependents multiplied by $500, the Credit for Other Dependents (ODC).

Employees can also include other tax credits they’re eligible for in this step, such as the adoption credit, the child and dependent care credit, and education credits like the American Opportunity Tax Credit.

Step 4: Other Adjustments

This step asks employees to list other sources of income that are not from multiple jobs or job-related. These include:

1. Other Income: This is other income that is not from jobs and won’t have withholding, such as interest, dividends, and retirement income.
2. Deductions: Using the Deductions Worksheet (Step B on page 4), the employee can determine the amount of deductions they may claim. If they skip this line, their withholding will be based on the standard deduction.
3. Extra Withholding: This is for any additional tax the employee may want withheld each pay period.

Optional Step: Exempt from Withholding

Above Step 5 on the form (Sign Here), there is an option to claim exemption from federal withholding. Employees can claim exemption if they meet both of the following conditions:

• They have had no tax liability in the previous year.
• They expect to owe no federal income tax for the current year.

If claiming exemption, employees must check the box in the “Exempt from Withholding” section and complete Steps 1(a), 1(b), and 5. An exemption lasts one calendar year. Employees who claimed exemption for 2026 must submit a new W-4 by February 16, 2027, to keep it for 2027.

Step 5: Sign and Date Form W-4

The form is not valid unless it is signed and dated by the employee.

For Employers

.The employer section of the W-4 form includes:

• The name and address of the company
• The worker's first date of employment
• Your Employer Identification Number (EIN)

In addition to completing this section, employer responsibilities include:

• Keeping the employee's signed form on file for at least four years after the tax is due or paid
• Accurately recording the information provided in your payroll system
• Calculating the employee portion of federal withholding tax while also reporting the employer and employee shares of FICA (Social Security and Medicare tax)

IRS Guidelines for Employers

Employees are responsible for the accuracy of their information, but you must follow IRS rules for processing, storing, and rejecting W-4s:

• 30-Day Implementation: Put a revised W-4 into effect no later than the start of the first payroll period ending on or after the 30th day after you receive it.
• Pre-2020 Forms: Employees with a W-4 from 2019 or earlier aren’t required to submit a new one. Continue withholding based on the allowances on their most recent form.
• Invalid Forms: Treat a W-4 as invalid if it has unauthorized changes, such as crossed-out or added text, or if the employee indicates the information is false. Ask for a new form. Until you get one, withhold based on the last valid form, or as a single filer with no adjustments if there isn’t one.
• IRS Lock-In Letters: If you receive Letter 2800C, withhold at the rate the IRS specifies. Disregard any new W-4 that would lower withholding until the IRS tells you otherwise. Employees can still submit a W-4 that increases withholding.
• Electronic W-4s: You can collect W-4s electronically if your system meets IRS requirements, including an electronic signature made under penalties of perjury.
• Tips and Overtime Deductions: Employees who want their withholding to reflect these deductions must claim them in Step 4(b). The deductions don’t change FICA or state withholding.

Managing Employee W-4 Changes

Employees can submit a new W-4 at any time, and there’s no limit on how often they can update it. While you shouldn’t advise employees on what to claim, knowing how changes affect withholding can help you explain how the form works and anticipate paycheck changes:

• More Withholding: Claiming fewer credits in Step 3, reporting other income in Step 4(a), or requesting extra withholding in Step 4(c) increases the tax withheld from each paycheck.
• Less Withholding: Claiming deductions in Step 4(b) or updating filing status and dependent information reduces withholding and increases take-home pay.

When an employee submits a revised W-4, update your payroll system and put the change into effect within the IRS 30-day timeline. You can also encourage accurate withholding by:

• Sending Year-End Reminders: Encourage employees to review their W-4 before the new year, especially after a life change.
• Flagging Exemption Renewals: Remind employees who claimed exemption that they must submit a new W-4 by mid-February to keep it.
• Pointing to IRS Tools: Direct employees with complex situations to the IRS Tax Withholding Estimator or a tax professional.

When Should W-4 Forms Be Filled Out?

Every employee must complete the W-4 form as soon as they start work at any company. Failing to submit a W-4 on time may result in incorrect tax calculations. For example, if an employee fails to submit a W-4 upon hire, the company must treat the employee as a single filer with no other adjustments. This could result in the employee receiving an unexpectedly low paycheck.

Companies are often legally required to have the proper forms already completed when onboarding new employees, so it's best to have everything ready well before the deadline. If an employee hasn't completed their W-4 form by the first date of employment, they should do so as quickly as possible after getting hired.

Common W-4 Mistakes and How To Avoid Them

When new employees join a company, the W-4 form is often seen as just another piece of paperwork to fill out and sign. Employers should make sure that employees are aware of the importance of this form, since filing correctly can alleviate tax issues down the line. Payroll specialists site W-4 errors as a common cause of payroll processing bottlenecks, so it’s important to fill the W-4 out accurately. Common mistakes include:

• Over-Withholding: Claiming too few dependents or requesting excessive additional withholding can result in large refunds but will reduce monthly cash flow throughout the year.
• Under-Withholding: Claiming too many dependents, failing to account for additional income sources, or not properly adjusting for multiple jobs can lead to unexpected tax bills and potential penalties at tax time.
• Disregarding Additional Income: Failure to account for income from freelance work, rental properties, investment gains, or spouse's earnings can push taxpayers into higher tax brackets without corresponding withholding adjustments.
• Multiple Job Complications: When employees do not use the Tax Withholding Estimator or the multiple jobs worksheet, each employer may withhold as if that job were the only income source.
• Dependent Claiming Errors: Listing children who don't meet age or residency requirements, claiming dependents already claimed by an ex-spouse, or failing to update dependent information when children age out of eligibility can lead to inaccurate withholdings.
• Failure To Adjust Forms: Neglecting to adjust the W-4 form after a major life event, such as getting married or divorced, results in outdated information and inaccurate filing status.

Avoid these mistakes by having employees review the W-4 form annually and update it, if needed. Employees should also keep detailed records of all income sources and consider consulting a tax professional for complex situations. Employers can also offer W-4 workshops during open enrollment periods, giving employees an opportunity to ask questions or get assistance.