All new employees need to fill out the new Form W-4, Employee’s Withholding Certificate once they are hired. Filling out the form accurately is the responsibility of the employee, and the employer must accept the completed form as it is filled out. If an employer does not receive a completed Form W-4 from an employee, they are authorized to withhold federal income tax at the Single – No Deductions rate.
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What you’ll learn
Key takeaways about Form W-4 2026
- Determines how much federal income tax is withheld from an employee’s paycheck to help avoid unexpected tax liabilities
- Uses a five-step process (not withholding allowances) to calculate more accurate withholding amounts
- Some 2026 Form W-4 updates reflect tax changes introduced by the One Big Beautiful Bill Act (OBBBA), including new deductions and updated credit amounts
- New hires should complete this form and employees should update their form when their financial or life situation changes, such as getting married, having a child, or taking on additional income
Filling a W-4 out incorrectly can mean employees have unexpected tax liabilities at the end of the year, so encourage them to take their time and follow the instructions carefully. In this W-4 overview, we’ll explain more on what this form is used for, how to complete it, and who needs to fill it out.
What is a W-4?
The form has a five-step process and you’ll use Publication 15-T (Federal Income Tax Withholding Methods) for determining employee withholding. It no longer uses withholding allowances. A W-4 should be filled out by all employees when they are hired, or whenever their life or financial situation changes. For instance, some employees may want to fill out a new W-4 if they work a second job, get married, have a child, or get divorced.
What changed with the 2020 Form W-4 redesign?
The IRS introduced a significant redesign of Form W-4 in 2020, and it was the first overhaul in more than 30 years. The goal was to make the form easier for employees to complete and to align it with changes from the Tax Cuts and Jobs Act (TCJA), which eliminated personal and dependency exemptions.
The biggest shift was the removal of withholding allowances. Instead, employees now follow a five-step process that uses filing status, income from multiple jobs, dependents, and other adjustments to determine accurate withholding.
A few quick points employers should know:
- Existing employees were not required to complete a new form in 2020, and the same rule still applies today. They only need to submit a new W-4 if they want to update their withholdings.
- Employees are only required to complete Step 1 (personal information) and Step 5 (signature). Steps 2-4 are optional, but skipping them may result in withholding that doesn’t match their tax liability.
- The redesigned form looked more complex at first glance, mostly because the instructions and worksheets are more detailed. Once broken down, however, it’s more straightforward than the old allowance-based format.
- The IRS also launched an updated Tax Withholding Estimator, which helps employees estimate withholdings more accurately when completing the new form.
Although the redesign is now several years old, the 2020 version established the modern structure of the W-4 that employers and employees still use today — including the allowance-free format and the five-step layout.
2026 Form W-4 changes
The IRS released the 2026 Form W-4, Employee’s Withholding Certificate, with several updates tied to the One Big Beautiful Bill Act (OBBBA), enacted in 2025. While the overall five-step structure remains intact, there’s a few notable updates employers and employees should be aware of. The 2026 form expands to five pages (including instructions) and includes the following updates:
- Step 3 now includes separate lines (3(a) and 3(b)) for claiming dependents and other credits. The child tax credit amount has been increased to $2,200 per qualifying child, up from $2,000.
- Step 4(b) clarifies how deductions are handled, noting that if this line is left blank, withholding will be based on the standard deduction.
- The Deductions Worksheet for Step 4(b) has been expanded and moved to its own page, and in now 15 lines.
- New lines were added to the deductions worksheet to allow employees to estimate qualified tip income and overtime compensation, reflecting new deductions introduced by the OBBBA.
- A new checkbox to claim exemption from withholding appears after Step 4, replacing the prior method of writing “Exempt” on the form.
As you bring on new hires, they should complete this updated version of the form, and employers should familiarize themselves with the changes so they can answer general questions during onboarding.
Above is a printable PDF version of the W-4 Employee’s Withholding Certificate that you can you can fill out, print, or download.
Want to know how to fill out a Form W-4? Simple steps below
As an employer, you can answer some general questions about W-4s for employees, but you can not fill out the form for your employee, nor can you suggest what impact their selections will have on their taxes.
Changes for 2026
The 2026 Form W-4 is now finalized, and while the overall layout will look familiar, a few updates are worth noting — especially for employees who plan to adjust deductions.
The most significant change appears in Step 4(b). The deductions worksheet has been expanded and moved to its own page, with new lines for qualified tips and overtime compensation introduced under the One Big Beautiful Bill Act. This allows employees to factor in these new deductions when estimating withholding.
Other updates include a new checkbox to claim exemption from withholding, clearer labeling in Step 3 for dependent and credit entries, and updated dollar amounts tied to recent tax law changes.
Below, we’ll walk through each step of the 2026 Form W-4 and point out where these changes appear — along with screenshots of the updated form.
These are the steps your employee will need to follow:
Step 1: Personal Information
Your employee will enter their personal information including name, address, and their filing status. Note that for any employee who does not have a completed W-4 on file, you will calculate withholdings at the higher “Single” rate.
Step 2: Multiple jobs or spouse works (optional)
This section applies to employees who have more than one job or are married and filing jointly with a working spouse. The IRS offers some guidance here for employees to determine whether they need to complete this step and where to look for additional instructions. Option (a) provides the most privacy for the employee’s information, according to the IRS, as well as the most accurate calculations.
Step 3: Claim dependents and other credits (optional)
If your employee has dependents, they will complete this section. Single taxpayers with an income of $200,000 or less ($400,000 if married filing jointly) may be eligible for the child tax credit.
What’s new for 2026: On earlier versions of the form, Step 3 appeared as a single entry. On the 2026 Form W-4, Step 3 is split into 3(a) and 3(b), making it easier for employees to separate dependent credits from other eligible credits. The child tax credit amount has also increased to $2,200 per qualifying child.
Step 4: Other adjustments (optional)
Here, the employee can account for other income not from jobs or add in additional deductions or withholdings.
What’s different for 2026: In prior versions of the form, the deductions worksheet for Step 4(b) focused primarily on itemized deductions. The 2026 Form W-4 expands this worksheet and moves it to a separate page. It now includes dedicated lines for estimating qualified tip income and qualified overtime compensation, reflecting new deductions introduced by the One Big Beautiful Bill Act. You’ll see these updates on page 4 of the form.
If an employee skips Step 4(b), federal income tax withholding will be calculated using the standard deduction.
Claiming exemption from withholding (new for 2026): Employees who qualify as exempt from federal income tax withholding can now claim exemption by checking a dedicated box on the form. Previously, exemption was claimed by writing “Exempt” on the form.
Step 5: Signature
The employee will sign and date the form, and you will complete the Employer section.
Now that we better understand the steps to take care of this form, let’s find out when it should be filled out.
When should a W-4 be completed?
Form W-4 should be filled out by every new employee, preferably on their first day of employment, but no later than their first week. You do not need to file your employees’ W-4 forms with the IRS, but they should be kept on file with other personnel records for a minimum of four years. Payroll software providers often offer options for the employee to complete this paperwork entirely online — and often before their first day so you can get to training right away.
Form W-4 is a new hire essential
Getting Form W-4 completed during an employee’s first week isn’t just good practice — it’s essential for both parties. For employees, accurate completion ensures proper federal income tax withholding and helps avoid unwelcome surprises at tax time. For employers, having this form on file protects your business from compliance issues while demonstrating your commitment to helping new hires get their payroll setup right from day one. While you can provide general guidance about the form’s purpose and encourage employees to take their time completing it, remember that the responsibility — and the final decisions — rest with them. By prioritizing this simple but critical step in your onboarding process, you’re setting the foundation for a smooth payroll experience throughout the employment relationship.
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.