Form W-4

What is Form W-4?

Form W-4 tells employers how much federal income tax to withhold from employee paychecks. Employees complete this form when hired and can update it anytime their situation changes. The form collects information about filing status, multiple jobs, dependents, and other adjustments that affect the correct withholding amount.

The 2020 redesign

The W-4 was significantly redesigned for 2020, eliminating withholding allowances in favor of dollar amounts for credits and deductions. Employees accustomed to claiming a certain number of allowances need to complete the new form differently. The IRS withholding estimator tool helps employees determine the right entries for their situation.

Employer responsibilities

Employers must have a W-4 on file for every employee. You cannot advise employees how to complete the form. You must apply the withholding as indicated, even if it seems incorrect. If an employee claims exempt status, verify eligibility and note that exempt status expires annually. Retain W-4s for at least four years after the tax becomes due or is paid.