What Is a W-4 Form? How Federal Withholding Works in 2026

Form W-4, Employee's Withholding Certificate, is the US federal form an employee gives to an employer so the employer can work out how much federal income tax to withhold from each paycheck. The 2026 form opens: "Complete Form W-4 so that your employer can withhold the correct federal income tax from your pay." The form's header says: "Give Form W-4 to your employer." It also says: "Your withholding is subject to review by the IRS."

Billed publishes this page. The rules below are US federal rules, quoted from the 2026 Form W-4 (created December 8, 2025) and the IRS pages About Form W-4 (last reviewed or updated September 10, 2026) and FAQs on the 2020 Form W-4 (last reviewed or updated September 14, 2026), all opened on October 30, 2026. This is general information, not tax or payroll advice; ask your accountant or a tax professional how the rules apply to you. State income tax withholding has its own rules, which vary by state.

What the W-4 does

The 2026 form's general instructions say: "If too little is withheld, you will generally owe tax when you file your tax return and may owe a penalty. If too much is withheld, you will generally be due a refund." They add: "Complete a new Form W-4 when changes to your personal or financial situation would change the entries on the form."

The IRS's About Form W-4 page says: "Consider completing a new Form W-4 each year and when your personal or financial situation changes."

What happened to withholding allowances

Older versions of the form used withholding allowances. The IRS's FAQs on the 2020 Form W-4 say: "Allowances are no longer used for the redesigned Form W-4." They explain: "In the past, the value of a withholding allowance was tied to the amount of the personal exemption. Due to changes in law, currently you cannot claim personal exemptions or dependency exemptions."

The same FAQs say employees who gave their employer a W-4 before 2020 "are not required to furnish a new form merely because of the redesign."

The five steps on the 2026 form

The form says: "Complete Steps 2–4 ONLY if they apply to you; otherwise, skip to Step 5."

• Step 1, personal information: name, address, Social Security number and filing status. The instructions say the filing status "will determine the standard deduction and tax rates used to compute your withholding."
• Step 2, multiple jobs or spouse works: "Complete this step if you (1) hold more than one job at a time, or (2) are married filing jointly and your spouse also works." You choose one of three options: the IRS estimator, the Multiple Jobs Worksheet, or a checkbox if "there are only two jobs total."
• Step 3, dependents and other credits: "If your total income will be $200,000 or less ($400,000 or less if married filing jointly)", the form says "(a) Multiply the number of qualifying children under age 17 by $2,200" and "(b) Multiply the number of other dependents by $500".
• Step 4, other adjustments: (a) other income not from jobs, (b) deductions from the Deductions Worksheet, and (c) "Extra withholding. Enter any additional tax you want withheld each pay period".
• Step 5, sign: "This form is not valid unless you sign it."

In Step 2, option (a) is to "Use the estimator at www.irs.gov/W4App for the most accurate withholding for this step (and Steps 3–4)." The form adds: "If you or your spouse have self-employment income, use this option".

Exemption from withholding

The 2026 instructions say: "You may claim exemption from withholding for 2026 if you meet both of the following conditions: you had no federal income tax liability in 2025 and you expect to have no federal income tax liability in 2026." They warn: "If you claim exemption, you will have no income tax withheld from your paycheck and may owe taxes and penalties when you file your 2026 tax return." An exemption lasts one year: "You will need to submit a new Form W-4 by February 16, 2027."

Related forms

Two other forms have similar names, and each has its own page: what is a W-9 form and what is a W-2 form. For the employer's side of payroll, see what is payroll tax.

If you also have self-employment income, the 2026 instructions say: "Generally, you will owe both income and self-employment taxes on any self-employment income you receive separate from the wages you receive as an employee." See self-employment tax and quarterly estimated tax.

Sample: filling in Steps 3 and 4(c)

This is a sample with invented figures, for tax year 2026, using the 2026 Form W-4.

An employee who is married filing jointly expects total income under $400,000. They have 2 qualifying children under age 17 and 1 other dependent, and they want an extra $50 withheld from each of their 26 paychecks in the year.

1. Step 3(a): 2 × $2,200 = $4,400.
2. Step 3(b): 1 × $500 = $500.
3. Step 3 total: $4,400 + $500 = $4,900, with no other credits.
4. Step 4(c): $50 per pay period, which over 26 paychecks is 26 × $50 = $1,300 of extra withholding in the year.

The employer's payroll system uses these entries to work out the withholding from each paycheck. Whether these entries fit a given household is a question for your accountant or the IRS estimator.

Where Billed fits

Plans are on Billed's pricing page, and calculators are in the tools section. For more tax topics, see the taxes hub.

Related Articles

• What Is a W-2 Form?
• What Is Payroll Tax?
• What Is a W-9 Form?
• Small Business Tax Filing: A Step-by-Step Owner's Guide

Frequently Asked Questions

What is a W-4 form?

Form W-4, Employee's Withholding Certificate, is the US federal form an employee gives to an employer so the employer can withhold federal income tax from their pay. The 2026 form says: "Give Form W-4 to your employer." It also says: "Your withholding is subject to review by the IRS."

Does the W-4 still use allowances?

No. The IRS's FAQs on the 2020 Form W-4 say "Allowances are no longer used for the redesigned Form W-4." The 2026 form uses filing status, a multiple-jobs step, dependent and other credit amounts, and other adjustments instead.

When should I give my employer a new W-4?

The 2026 form's instructions say to "Complete a new Form W-4 when changes to your personal or financial situation would change the entries on the form." The IRS's About Form W-4 page also suggests considering a new form each year.

Who can claim exemption from withholding?

For 2026, the form says: "You may claim exemption from withholding for 2026 if you meet both of the following conditions: you had no federal income tax liability in 2025 and you expect to have no federal income tax liability in 2026." With an exemption, no federal income tax is withheld, and the form says you "may owe taxes and penalties when you file your 2026 tax return." Ask your accountant or a tax professional if you're unsure.