W-4 Tax Form

What Is a W-4 Tax Form?

Form W-4, officially called the Employee’s Withholding Certificate, is an Internal Revenue Service document employees complete and submit to their employer to specify how they want federal income taxes withheld from their paychecks. Workers can use the IRS Tax Withholding Estimator to help them choose an estimated withholding amount that works for them.  

The information provided on Form W-4 helps employers accurately calculate how much tax to withhold during payroll processing. Employers use details such as filing status, multiple jobs or a working spouse, dependents, additional income, and deductions to make sure each employee’s withholding aligns with their individual tax situation.

What Is the Purpose of the W-4 Form?

The W-4 form plays an important role for both employees and employers.

For employees, the information you provide on your W-4 determines how your employer calculates federal income tax withholding, and ultimately, how much you take home each pay period. Claiming more credits and deductions means less tax withheld and higher take-home pay. Requesting extra withholding results in smaller paychecks.

The form can also help employees manage their overall tax liability for the year. Under-withholding can lead to an unexpected tax bill and possible penalties, while over-withholding essentially gives the government an interest-free loan.  

For employers, the IRS requires a signed W-4 on file for every employee. These forms provide the details you need to calculate and withhold the correct amount of federal income tax from each paycheck and to make timely deposits to the IRS.  

At year’s end, employers also use W-4 information to prepare each employee’s Form W-2, Wage and Tax Statement, which reports total wages and taxes withheld for both employee and IRS records.

Who Needs to File a W-4?

Every employee who receives wages from a U.S. employer must complete a Form W-4 when starting a new job. The information on the form tells the employer how much federal income tax to withhold from the employee’s pay. Employees should also file an updated W-4 whenever their personal or financial circumstances change.

Key Changes to the W-4 Form Over Time

The W-4 form underwent a major redesign in 2020 to make it easier for employees to accurately calculate their tax withholding. The IRS removed "withholding allowances," which were previously tied to personal exemptions that were eliminated under the 2017 Tax Cuts and Jobs Act. The new form focuses instead on straightforward income, dependent, and deduction information to better reflect each employee’s tax situation. All new employees hired after 2019 must use the redesigned W-4 form.

Since then, the IRS has made only minor updates. The 2024 form incorporated the latest tax brackets and standard deduction amounts, along with a revised deductions worksheet.  

For 2025, the IRS confirmed there are no substantive changes to the W-4 form or federal withholding procedures due to recent tax law updates. Employees are encouraged to use the IRS Tax Withholding Estimator for more accurate calculations, particularly if they have self-employment income, multiple jobs, or other unique tax situations.

Some employees may wish to adjust their withholding to reflect new or expanded deductions introduced under the One Big Beautiful Bill Act (Public Law 119-21). Those who choose to do so can complete a new 2025 Form W-4 and use the IRS deductions worksheet (Step 4(b)) or consult a tax professional for assistance. Employees can adjust their W-4 forms at any time throughout the year to align their tax withholding with their actual tax liability.

The IRS also announced new guidance and updated forms in development for the 2026 tax year. These changes are expected to address how tips and overtime pay are reported, with the agency coordinating with payroll providers and employers to foster a smooth transition.

What Information Is the W-4 Asking About?

Each section focuses on a specific part of a person’s financial and family situation. 

• Personal information: Employees begin by providing their name, Social Security number, and filing status (single, married, or head of household). 

• Multiple jobs or working spouse: The multiple jobs worksheet in Step 2 accounts for situations where an employee has more than one job or a spouse who also works, so the total household income is factored into withholding. 

• Dependents and tax credits: Step 3 allows employees to claim dependents and eligible tax credits, such as the Child Tax Credit, which can reduce the amount withheld. 

• Other income and deductions: In Step 4, employees can report additional income that is not subject to withholding (such as freelance or investment income) and include deductions or adjustments beyond the standard deduction. 

• Extra withholding requests: Employees can request that additional tax be withheld from each paycheck if they prefer a larger cushion at tax time.

• Employees must sign and date the W-4 form in Step 5 for it to be valid.

How to Fill Out a W-4 Tax Form (Step-by-Step)

Completing a W-4 form is straightforward. Employees fill out the form in five brief steps:

1. Provide personal information such as your name, address, Social Security number, and filing status.

2. Account for multiple jobs or a working spouse if applicable, so the total household income is reflected correctly.

3. Claim dependents and eligible tax credits.

4. Include other income or deductions if you want to adjust your withholding beyond the standard calculation.

5. Sign and date the form before submitting it to your employer.

For more detailed instructions, see our article, How to Fill Out Form W-4.

You can also access the official IRS W-4 form and instructions (PDF).

When Is the W-4 Usually Completed?

Employers are required to provide each new employee with a W-4 form when they’re hired. This can be done using a paper form or an approved electronic system, provided it meets IRS requirements.

Once employees receive the form, they’re responsible for completing it accurately and submitting it to their employer, ideally before their first paycheck is issued. If an employee doesn’t return a W-4, the employer must withhold federal income tax as if the employee is single with no adjustments.

Employees should also review and update their W-4 whenever their personal or financial situation changes. Common examples include getting married, having a child, starting a second job, or gaining or losing a source of income.  

In light of recent tax law changes, some workers in tipped occupations may also want to review their W-4 information. Under the One Big Beautiful Bill Act, the U.S. Treasury Department released a preliminary list of nearly 70 occupations that customarily received tips before December 31, 2024, and may qualify for the new “No Tax on Tips” provision. These include roles in food and beverage service, hospitality, gaming, and entertainment, as well as emerging fields such as digital content creation and rideshare driving.

In addition to updating your W-4 when life changes occur, it’s also wise to review it annually to keep your withholding accurate and avoid surprises at tax time.

Common Mistakes to Avoid When Completing a W-4

Even though the W-4 form is relatively short, any errors can lead to inaccurate tax withholding. Avoiding these common mistakes can help keep both paychecks and year-end tax filings on track.

• Forgetting to update the form after major life changes: Changes such as marriage, divorce, the birth of a child, or a new job can all affect your tax situation. If you don’t update your W-4, your withholding might no longer match your financial reality.  

• Leaving sections blank or incomplete: Each step on the form affects how your taxes are calculated. Omitting information, such as filing status or dependent details, can cause the wrong amount to be withheld.

• Misunderstanding the multiple jobs section: If you or your spouse has more than one job, it’s important to complete Step 2 correctly. Overlooking this step could lead to under-withholding and an unexpected tax bill at year’s end.

• Forgetting about additional income or deductions: If you earn money outside of your main job (for example, freelance work or investments) and don’t account for it, you may owe more taxes when you file. Not factoring in deductions or credits could also lead to excess withholding.

• Not signing or dating the form: A simple but common oversight, unsigned W-4s are invalid, meaning employers can’t process them until they’re properly completed.

Not paying enough federal income tax during the year can result in a tax bill and penalties when filing a tax return.

Employer Responsibilities With W-4 Forms

The IRS requires employers to retain employment tax records, including Forms W-4, for at least four years after the date the taxes were paid or became due, whichever is later. Because these forms contain sensitive personal information, they should be stored securely.

If you use electronic storage, the system should be reliable, able to produce clear printed copies upon request, and protected by strong passwords and other security safeguards.

Access to W-4 forms should be limited to authorized personnel, such as members of your human resources or payroll staff, who have a legitimate business need to view or handle the information.

Employers are responsible for entering each employee’s W-4 data accurately into the payroll system. It's worth the time to verify this information to help reduce the risk of payroll errors and maintain IRS compliance.

It's also up to employers to update their payroll records promptly when an employee submits a new or updated W-4. Employers must begin using the revised withholding information no later than the first payroll period ending on or after the 30th day from the date the form was received.  

If an employee submits a W-4 that’s missing required information or contains obvious errors, the employer should return it for correction before applying the changes. Until a valid form is received, employers must calculate withholding as if the employee is single with no adjustments.  

[H2] What is the Difference Between a W-2 and a W-4 Tax Form?

A W-4 form is completed by the employee and gives the employer instructions on how much federal income tax to withhold from each paycheck. A W-2 form is prepared by the employer at the end of the year and reports an employee’s total wages and the taxes withheld for that tax year. W-2 forms must be provided to employees by the end of January each year to summarize their tax liability from the past year.

Key Takeaways

Understanding how the W-4 form works helps both employees and employers ensure that federal income tax withholding is accurate throughout the year.

Regularly reviewing and updating the form, especially after major life changes, can help prevent payroll errors, tax surprises, and compliance issues.

A payroll solution like SurePayroll® By Paychex can help small businesses streamline payroll processing, tax calculations, and withholdings.

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