What Is a W-4 Form & How To Fill It Out in 2025

The IRS releases an updated W-4 each year, reflecting any design changes or adjustments for inflation. With the 2025 update scheduled to release in December, now is a great time to refresh your knowledge about what the form is, what it is used for, and how to handle these important documents.

What Is a W-4 Form?

Form W-4 is a four-page Internal Revenue Service form that consists of the withholding certificate, worksheets, withholding tables, and instructions. It is also known as the Employee's Withholding Certificate. After an employee completes the form, the employer uses that data to calculate how much federal income tax should be withheld from the worker's pay.

The 2025 W-4 form has minor changes compared with previous versions, so it's important to use the most recent version.

What Is the Purpose of the W-4 Form?

The purpose of the W-4 form is to inform employers of an employee's withholding status so the employer can determine their payroll tax responsibilities and withhold the correct federal income tax from the employee's pay. Because Social Security and Medicare are set rates, Form W-4 has no bearing on those taxes.

A new employee must provide an up-to-date W-4 that specifies their tax withholding status (single, married filing jointly, or head of household), their sources of income, and the dependents they wish to claim to determine the amount of their federal tax credits.

2025 W-4 Changes

The last major changes to Form W-4 were made in 2020, when the IRS updated the design to simplify the process of reporting the amount of federal income tax an employee wants withheld from each paycheck. Other changes included the elimination of allowances and a new option to account for money earned from other jobs and a spouse's salary.

The 2025 W-4 includes only a few minor additional changes. These changes build on the 2020 modifications and include:

• No Allowances: Allowances are still not available on 2025 W-4 forms. Instead, employees should use the 5-step process on the form to determine credits, deductions, and withholding amounts.
• IRS Tax Withholding Estimator: Instructions for the form encourage employees to use the Tax Withholding Estimator to estimate how much federal income tax an employer should withhold.
• Tax Tables for Multiple Jobs: Tax tables have been updated for the Multiple Jobs Worksheet. This worksheet should be completed if an employee works more than one job or is married and filing jointly (and the spouse works). Employees should submit a new W-4 for all jobs they work if they have not done so since 2019.
• Standard Deduction Amounts: Standard deductions have increased across the board. The new amounts for each filing category are:
  • Single Taxpayers and Married Couples Filing Separately: $15,000 ($400 increase)
  • Married Couples Filing Jointly: $30,000 ($800 increase)
  • Heads of Households: $22,500 ($600 increase)
• New Deductions: New deductions were added in July 2025 and will take effect for the 2025 tax year. Qualifying deductions primarily aim to reduce the tax burden for seniors and working Americans.

W-2 vs. W-4 Forms: What Is the Difference?

W-2 and W-4 forms both help employers track their employees' compensation and tax withholdings, but they are used at different times in the payroll process and serve different purposes.

A W-2 form is an annual statement given to employees. It documents how much they earned during the year, how much tax was withheld, and the value of any benefits provided (if applicable). Employees use the W-2 to complete their individual tax returns.

A W-4 form gives employers the necessary personal information (such as marital or dependent status) to determine tax deductions and withholding amounts. Employees must complete this form before they start a new job. Employers use the information provided on the form as a basis for payroll calculations.

Who Needs To Fill Out a W-4 Form?

All new employees are required to complete a W-4 form when beginning a new job. In addition, any employee who experiences significant changes to their personal or financial situation, that affects their tax liability, and wants the most accurate amount withheld from their pay should complete a new W-4 and use the IRS Tax Withholding Estimator to determine the correct amount.

Current employees should fill out a new W-4 if:

• There's a change in filing status (e.g., an employee gets married, divorced, or becomes a head of household).
• There's a change in the number of dependents for whom a child tax credit can be claimed.
• 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 of income.

How To Fill Out a W-4 Form as an Employer

The employee completes the majority of the W-4, but there is a small section at the bottom of page 1 that must be completed by the employer. This section includes:

• The name and address of the company. If your company has multiple locations, you can use either the home office address or the address of the location where the individual will be employed.
• The worker's first date of employment.
• Your Employer Identification Number (EIN).

In addition to completing this section of the form, your responsibilities as an employer also include:

• Keeping the employee's completed and signed form on file.
• Accurately recording the provided information in your payroll system.
• Calculating the employee portion of any federal taxes and sending them to the IRS, along with your employer portion of the taxes.

How To Fill Out a W-4: Requirements 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.

Step 1: Provide Required 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: Report Eligible Job Income

This step helps employees determine the most accurate tax amount to withhold. Employees should complete this step if they hold more than one job at a time or are married and filing jointly (and the spouse works).

To complete this step, employees should account for money earned from other jobs, as well as a spouse's salary, using only one of the following options:

• The IRS Withholding Estimator (most accurate)
• The Multiple Jobs Worksheet

Self-employed individuals also should use the estimator.

The employee would then complete steps 3 to 4(b). To get the most accurate withholding, use information for the highest-paying job.

Step 3: Review Dependent Tax Credits

Individuals with children may qualify for the Child Tax Credit (CTC). For 2025 the maximum credit is $2,200 per child, with a refundable portion of $1,700. The income limit for the CTC is $200,000 for individuals and $400,000 for married couples filing jointly.

Other potential credits include the Credit for Other Dependents (ODC), the adoption credit, the child and dependent care credit, and the American Opportunity tax credit.

Step 4: Add Additional Sources of Income

Section 4(c) asks employees to list other sources of income that are not job-related, such as interest, dividends, retirement income, and any deductions other than the standard deduction. Employees may also enter any extra withholding or additional tax they want taken out each pay period if desired.

This step is optional. It provides the most accurate withholding amount, but filling out the deductions worksheet requires information the employee might not have on hand.

Employees might have questions about this section because it allows visibility into their entire income amount.

Optional: Claim Federal Tax Withholding Exemption if Applicable

A W-4 tax exemption allows employees to claim exemption from federal income tax withholding if they meet both of the following conditions:

• No tax liability in the previous year
• Expect to owe no federal income tax in the current year

Employees can claim this exemption by completing only steps 1 (name, address, and Social Security number) and step 5 (signature). They must also write "Exempt" in the space below Step 4(c) on Form W-4 before submitting it to their employer.

The exemption applies only to federal income taxes. Social Security and Medicare taxes will still be withheld. Exemptions must be renewed annually by February 15th if still applicable.

Step 5: Sign and Date Form W-4

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

How To Make Adjustments to Your W-4

Employees can adjust their W-4 forms at any time throughout the year to better align their tax withholding with their actual tax liability. To have more taxes withheld from their paychecks, they can reduce the number of dependents claimed in Step 3, add extra income from side jobs or investments in Step 4(a), or request additional withholding amounts in Step 4(c). This is useful for those who typically owe taxes at filing time or want a larger refund.

To have fewer taxes withheld and increase take-home pay, employees can claim tax deductions in Step 4(b) or adjust their filing status and dependent information to more accurately reflect their situation.

There is no limit on how frequently employees can update their W-4 throughout the year. The IRS encourages taxpayers to review and update the form when life changes occur (such as a marriage, divorce, new dependents, or job changes) or when the previous year's withholding was significantly over or under the actual tax liability.

When Must All W-4 Information for an Employee Be Entered?

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 Form Mistakes and How To Avoid Them

Making errors when completing W-4 forms can lead to unpleasant surprises when it's time to file your taxes. 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 reviewing and updating the W-4 form annually or whenever significant life changes occur. Use the Tax Withholding Estimator to ensure accuracy, keep detailed records of all income sources, and consider consulting a tax professional for complex situations.

Some employers offer a W-4 workshop during open enrollment periods, giving employees an opportunity to ask questions or get assistance with filling out their W-4 form.