What Is Form W-4?

Form W-4 Explained

A taxpayer completes their taxes online from the comfort of home.
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Every employee must fill out Form W-4 to determine how much money their employer will withhold from their paychecks for taxes. Form W-4 provides your employer with your filing status, the number of dependents you have (if applicable), and the tax credits and deductions you intend to claim when you file your return.

The Internal Revenue Service (IRS) issued a revised version of the form in 2020. It was intended to increase transparency, simplicity, and accuracy. This version remains in place in 2023.

Key Takeaways

  • Form W-4 indicates how much your employer should withhold from your pay for taxes based on information you provide.
  • There are several types of Forms W-4, including Form W-4 (SP), Form W-4P, Form W-4S, and W-4V.
  • You may owe a penalty if you pay too little in taxes throughout the year. 
  • Form W-4 was redesigned in 2020 to make it more transparent and easier to complete. 


How Does Form W-4 Work?

Previously called the “Employee’s Withholding Allowance Certificate,” Form W-4 is the "Employee's Withholding Certificate" in 2022. It was renamed when it was redesigned in 2020. The revised name is intended to reflect that you can no longer claim personal or dependency exemptions.

The form consists of five sections. You’re only required to complete sections one and five but completing additional sections can help your employer more accurately determine the appropriate amount to withhold from your paychecks.

IRS Form W-4

Example of Form W-4

Steps 1 and 5 are the mandatory sections of Form W-4 that must be completed. The other three steps finetune your withholding for your personal situation:

  • Step 1 (REQUIRED): This is where you’ll enter your name, address, Social Security number, and tax filing status. 
  • Step 2: This step takes into consideration extra income from other jobs and/or your spouse’s job if you’re married and filing a joint tax return
  • Step 3: This step is used to estimate credits you receive for any dependents you might have. You can include the amounts of other credits you anticipate receiving as well, such as education credits. Completing this step will reduce your withholding.
  • Step 4: In this step, you can include extra income (not from other jobs or self-employment) from which tax isn't withheld. This will increase your withholding. You can also include how much you intend to claim in deductions other than the standard deduction. This will decrease your withholding. If you want a specific additional amount withheld from your paycheck, you can indicate it in this step as well.
  • Step 5 (REQUIRED): This is where you sign the form.

About Step 4(c)

Step 4(c) allows you to request extra withholding above what would normally be withheld from your pay, or to reduce withholding if you expect the deductions you claim to exceed your standard deduction.

You might increase how much is withheld if you owed the IRS money when you last filed your return. You could divide the amount you owed by the number of pay periods remaining in the year to avoid a future tax bill. you could submit a new W-4 to have your employer withhold an additional $84 from each of your paychecks if there are 36 pay periods left in the tax year and you owed $3,000 last year.

Note

This option should only be used as a quick fix and a temporary remedy until you get your W-4 completed correctly, which you should do as soon as possible.

If you want less withheld because you anticipate getting a refund, you can use step 4 to indicate the additional deduction amount you expect to claim over and above the standard deduction for your filing status. Your employer can use this information to calculate a new withholding amount that would leave more in your paycheck but would reduce or eliminate your tax refund.

Who Uses Form W-4?

Your employer uses the information you enter on Form W-4 to determine what percentage of your pay should go to income taxes. All employees receive this form if taxes are to be withheld from their pay, regardless of whether they work full or part time.

Note

Freelancers and independent contractors should complete and submit Form W-9 instead because taxes aren’t withheld from payments that are made to them. They’re responsible for making their own estimated quarterly tax payments in lieu of withholding using Form 1040-ES.

Several factors influence the amount of income tax that’s withheld, including your filing status and how many dependents you have. Your employer would withhold more to cover your tax liability if you’re single with no dependents than if you’re married or you’re head of household with one or more dependents, assuming all other information is identical. Having more withheld means a smaller paycheck.

Your employer also withholds additional money to pay your Federal Insurance Contributions Act (FICA) taxes, which covers Social Security and Medicare. Social Security and Medicare taxes are statutory percentages. They aren't impacted by the information you include on the W-4.

Types of W-4 Forms

Form What It's Used For
Form W-4 Calculating withholding from salary and wages
Form W-4 (SP) For use by Spanish-speaking employees
Form W-4P Calculating withholding from pensions and annuities
Form W-4S Calculating withholding from sick pay
Form W-4V Calculating withholding from government payments

Form W-4

Employees who already had a W-4 on file from previous years didn't have to complete the revised 2020 form, but you can do so if you want to change their withholding. You must use the revised form in this case, as must all newly hired employees. 

Form W-4 (SP)

Form W-4 (SP) is a Spanish version of the standard W-4. Aside from the change in language, the form is exactly the same as Form W-4.

Form W-4(SP) IRS

Form W-4P

You would use Form W-4P if you receive income from pensions, annuities, or certain other deferred compensation. Submit this version of the W-4 if you want your plan administrator or employer to withhold taxes from a pension or annuity.

Form W-4S 

Your employer might ask you to complete this version of the form if you also want them to withhold taxes from any sick pay to which you're entitled.

Note

This form is submitted to a third-party payer of your sick pay, such as an insurance company. Form W-4S will allow federal income tax to be withheld from these payments when it's filled out and submitted.

Form W-4V

Form W-4V is voluntary. You can use it to ask the payer to withhold federal income tax from government payments you might receive, such as Social Security or unemployment income.

Where To Get Form W-4

Your employer should provide you with a blank Form W-4 to fill out, along with its accompanying worksheets. You can also download the form from the IRS website's "Forms and Publications" page.

Note

The IRS also offers an interactive W-4 withholding calculator on its website. The calculator automatically makes adjustments if it appears that you’re eligible for tax credits, and it accommodates more than one income if you’re married and planning to file a joint return.

If You’re Exempt From Withholding

If you’re exempt from tax withholding, Form W-4 provides a space you can use to indicate this. First, confirm that you're exempt by reviewing Form W-4 instructions under “Exemption from withholding.” You're exempt for the 2022 tax year if:

  • You had no federal income tax liability in 2021.
  • You expect to have no federal income tax liability in 2022.

Write "Exempt" in the space below Step 4(c) in this case. Complete steps 1(a) and 1(b) and step 5. You must complete and submit the form even if you're exempt.

Check with a tax professional before claiming exemption to make sure you meet the qualifications. You could owe a penalty otherwise. You'll have to redo your W-4 each year to indicate that you qualify as exempt for that particular tax year if you are exempt.

How To File Form W-4

You don't have to file Form W-4 with the IRS. Simply complete it and give it to your employer. You must do this when you begin working for the company, but you can also submit a new one if your circumstances change or you otherwise want to adjust your withholding.

Frequently Asked Questions (FAQs)

What's the difference between Form W-2 and Form W-4?

Employees use Form W-4 when they start working for an employer to provide information necessary for tax withholding calculations. Form W-2 summarizes your earnings and withholding throughout the tax year and is provided to you by your employer after year's end. You would then use your Form W-2 to prepare your tax return for the previous year.

How do you fill out the W-4 to get more money?

You'll have less taxes withheld from your pay if you claim more dependents or qualify for other tax credits, so the amount of each of your paychecks will increase. But your potential tax refund will decrease or perhaps even be eliminated in exchange for those larger paychecks. You may have to pay additional taxes and make up the difference when you file your tax return if you incorrectly claim credits you didn't qualify for and come up short.

Updated by
Jess Feldman
jess feldman in a white shirt
Jess Feldman has been writing and editing for over five years, and currently focuses on financial topics. As an associate editor on the special projects team, she writes, edits, and develops tentpole brand projects across a variety of platforms. Since joining the financial space, she's developed an interest in finding ways to make the complex topic of finance relatable to younger generations, specifically via TikTok. Jess has a journalism degree from the University of Maryland Philip Merrill College of Journalism.
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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. IRS. "Publication 15, (Circular E), Employer's Tax Guide."

  2. IRS. "Topic No. 751 Social Security and Medicare Withholding Rates."

  3. IRS. "About Form W-4 P, Withholding Certificate for Pension or Annuity Payments."

  4. IRS. "Form W-4S Request for Federal Income Tax Withholding From Sick Pay."

  5. IRS. "W-4 Employee’s Withholding Certificate." Pages 1-2.

  6. IRS. "About Form W-2, Wage and Tax Statement."

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