A W-4 form tells your employer how much money to remove from each of your paychecks in order to accurately pay your federal income taxes. In general, employers remove a certain amount of money from each employee’s paycheck and sends it to the Internal Revenue Service (IRS) in order to pay their federal taxes throughout the year. The amount an employer removes is called tax withholding.
You generally need to fill out a W-4 when you start a new job or when you experience a life event that could affect your taxes, like getting married, having a child, or buying a house. You can update your W-4 as often as you’d like. Not all employers withhold taxes, though. If you get a 1099 form from your employer during tax season, they most likely aren’t withholding taxes. If you get a W-2 from your employer come tax season, your employer withheld taxes.
Form W-4 is distinct from Form W-2. A W-4 helps your employer know how much tax to withhold from your paychecks, while a W-2 is something your employer sends during tax season to tell you how much tax it already withheld during the past year.
What is a W-4?
IRS Form W-4 is a federal tax form that tells your employer how much tax to withhold from each of your paychecks so that you will pay the proper amount of annual tax. Employers use your W-4 to know how much federal income tax and FICA tax (covering Social Security and Medicare taxes) to withhold.
A W-4 form is also mostly for your employer’s records, so it doesn’t need to go to the IRS. When you fill out a W-4, give it to your employer and do not send it to the IRS.
Who needs a W-4?
Most employees need to fill out a W-4 for their employer. If you have multiple jobs that withhold tax, you will need to complete a W-4 for each job. In general, you don’t need to fill out a W-4 for your employer if you’re self-employed, a freelancer, or an independent contractor.
If your employer sends you a 1099 form during tax season, you shouldn’t need to complete a W-4 for that employer because they most likely aren’t withholding income taxes. Employers that send you a W-2 during tax season are withholding income tax and you’ll need to give them a W-4 form.
Do I need state W-4 forms?
If your state, county, city, or other local government collects income tax, your employer will likely require you to complete a state version of the W-4. Each state sets its own tax code, so each state will have its own version of this form. Your state may call their form a W-4, but the name and layout may also be completely different from the federal version.
Form W-4 vs. W-2
Form W-4 and W-2 are completely distinct tax forms. Form W-4 tells your employer how much tax to withhold from your upcoming paychecks, and you need to fill it out for your employer when you start a job or when you have a life change that affects your taxes.
A W-2 is a form that your employer sends you during tax season and it tells you how much tax your employer withheld during the past tax year. A W-2 also lists the total income you earned and how much of your income was actually subject to tax.
Learn more about how to read a W-2 form.
When to update your W-4
Since your W-4 affects how much income tax you’re paying out of your paychecks, you should update your W-4 any time you experience a life event that could affect your taxes. It’s also a good idea to check your W-4 at the beginning or end of each year, just to make sure it’s still accurate.
Here are some possible reasons to update your W-4:
You got married or divorced.
You had a child, including through adoption.
Your child no longer qualifies as a dependent.
You started a second job or changed jobs.
You got a raise and want to make sure you withhold enough for your new pay rate.
Your spouse got a second job, a new job, or a raise (if you file a joint return).
You or your spouse is unemployed for any amount of time.
You move or buy a house.
You can update your W-4 at any time, and you can update it as many times as you want. Changes may take up to 30 days to take effect, though. Many employers and HR services allow you to change your W-4 digitally online, but your employer may require you to fill out and submit a paper form.
How to fill out a W-4 in 2023
The 2023 W-4 has five sections, labelled as steps. Each step asks you about different types of income or tax deductions, so that you can determine how much your employer should withhold for each item. Everyone has to fill out steps 1 and 5 of the W-4, but you only need to fill out 2 through 4 if they apply to you.
To make the W-4 process easier, have last year’s tax return on hand (assuming your tax situation is similar to last year).
Step 1: Personal information
Step 1 simply requires your name, address, Social Security number, and tax filing status.
Step 2: For joint filers & people with multiple jobs
You only need to complete step 2 if you have more than one job or if you’re married and filing jointly with a spouse who also works. Completing this step is potentially the most complicated, but it ensures you withhold enough tax to cover all of your income.
There are three possible ways to fill out step 2. They’re labelled as 2a, 2b, and 2c, but in 2023 you must choose either 2b or 2c (see below).
Step 2a: In previous years, this step pointed you toward the IRS withholding estimator app to determine how much tax to withhold per pay period. But the 2023 W-4 no longer includes this reference, so you must now choose between Step 2b or Step 2c below.
Step 2b: Instead of the app, you can fill out the Multiple Jobs Worksheet on page 3 of the W-4 instructions. This step requires you to look up your income in a table and then divide the table value by the number of your annual pay periods. (For example, a job that pays every other week would have 26 pay periods.) If you have multiple jobs with a salary above $120,000, or if you have income from more than three jobs, you will also need to reference the withholding tables in IRS publication 505.
Step 2c: If you have only two jobs (including if you have one and your spouse has one) and they both have similar salaries, you can check the box in step 2c without having to do any of the things in steps 2b and 2c. Make sure you check this box for each job’s W-4.
If you used step 2b or 2c, the result will go on line 4c, later in the form. Your result is the total amount to withhold per paycheck, and the IRS suggests writing this number on the W-4 of the highest paying job.
Step 3: Claim dependents
Complete step 3 only if you have dependents and if you’re either a single filer with an income of $200,000 or less, or if you’re a joint filer with an income of $400,000 or less. In other words, this step applies to people who qualify for the child tax credit (CTC) or the credit for other dependents (ODC).
Step 4: Make other adjustments, if necessary
Step 4 has three parts that allow you to withhold any additional tax if necessary. If you completed 2b, you will write your result on 4c. Most other tax filers don’t need to use step 4.
Step 4a allows you to withhold income tax for any other taxable income you have outside of your jobs, such as interest, dividends, and retirement income. If you expect to earn more than $1,000 of untaxed income, you may need this step (otherwise you may need to pay estimated taxes).
Step 4b allows you to adjust your income tax withholding based on any deductions you plan to claim. This step mostly applies to people who itemize deductions instead of taking the standard deduction, but you may also want to use it if you claim any of the deductions on Schedule 1, like the student loan interest deduction, and want to fine-tune your withholding to maximize the size of your paychecks. Use the worksheet called Deductions Worksheet on page 3 of the Form W-4 instructions.
Step 4c is where you enter any amount you want your employer to withhold from each of your paychecks. If you completed step 2b, write your result here.
Step 5: Sign
Sign and date the form before returning it to your employer. If your employer lets you complete your W-4 digitally, you will probably be able to use an electronic signature instead of having to print and sign. There is also a box in step 5 for your employer to sign.
How the W-4 has changed in recent years
Filling out your W-4 for 2022 is a bit different than it was a few years ago, most notably because it no longer asks you to claim allowances. The 2017 tax reform (The Tax Cuts and Jobs Act) got rid of allowances until 2025, and the current W-4 reflects the removal of allowances. The current W-4, without allowances, may take longer to fill out for certain taxpayers, but it can also help you more accurately withhold tax.
Learn more: Who benefited from the 2017 Trump tax cuts?
