Form W-4

The IRS form employees use to tell you how much federal income tax to withhold from their paychecks. Collect it at hire, enter it in payroll, and keep it on file: it is never sent to the IRS.

See the Step-by-Step ProcessGet Form W-4
What An employee-completed IRS form that tells you how much federal income tax to withhold from each paycheck. It drives your payroll system's withholding calculation.
Who All employers, for every employee: new hires and existing employees who submit an update.
When Collect at hire; apply changes when an employee submits an updated form; re-collect each February 15 for any employees claiming exempt status.
Risk There is no specific per-violation penalty for W-4 errors, but the downstream consequences matter. Under IRC §3403, the employer is liable for any federal income tax that should have been withheld and wasn't, meaning if you fail to implement a lock-in letter or apply an updated W-4, you can be held responsible for the tax gap, plus failure-to-deposit penalties and interest on any underwithheld amounts that weren't remitted on time.
Hire
New hire W-4

Apply with the first payroll you can, typically the next payroll run.

Feb 15
Exempt re-file

Employees claiming exempt status must re-file by February 15 each year.

60
Lock-in letter

Implement Letter 2800C by the date in the letter, typically 60 days from the letter date.

Trigger Due Date / Window Notes
New hire W-4 received Apply with the first payroll you can (typically the next payroll run) If no W-4 is on file, withhold as if the employee is Single or Married Filing Separately with no other adjustments (per IRS Publication 15-T).
Employee submits an updated W-4 As soon as administratively practicable; no later than the start of the next payroll period You are not required to implement retroactively for the current period.
Employees claiming "Exempt" status Must re-file by February 15 each year If no new exempt W-4 is received by February 15, begin withholding as Single/MFS with no adjustments until a valid form is received.
IRS lock-in letter (Letter 2800C) received Implement by the date in the letter (typically 60 days from the letter date) Overrides the employee's W-4. Do not decrease withholding below the locked rate for any reason unless the IRS issues a modification letter (2808C).
Trigger: New hire W-4 received
Window: Apply with the first payroll you can
Notes: No W-4 on file: withhold as Single/MFS with no adjustments (Pub. 15-T).
Trigger: Employee submits an updated W-4
Window: By the start of the next payroll period
Notes: Not required to implement retroactively for the current period.
Trigger: Employees claiming "Exempt"
Window: Re-file by February 15 each year
Notes: No new exempt W-4 by Feb 15: withhold as Single/MFS until a valid form arrives.
Trigger: IRS lock-in letter (Letter 2800C)
Window: By the date in the letter (typically 60 days)
Notes: Overrides the W-4. Do not decrease below the locked rate unless the IRS issues a 2808C.
  • Current IRS Form W-4 (2026 version): Always use the version currently posted on IRS.gov. The 2026 form was updated due to tax law changes and has different values in Step 3 than prior versions. See the green section below for a direct download link.
  • Employee information to verify: Legal name, SSN, filing status, any entries in Steps 2 to 4, signature, and date. Return incomplete forms before entering them in payroll.
  • Payroll system access: To enter or update the withholding settings and confirm the correct tax year's tables are loaded.
  • State withholding form (if applicable): Many states require a separate state withholding certificate in addition to the federal W-4. Check with your state's department of revenue; some states accept the federal form, others have their own. Collect the state form at hire wherever required.
1
Provide the current 2026 W-4 and instructionsGive them to the new hire, or route them through your e-onboarding portal. Share the IRS Withholding Estimator link (see green section below) for employees with complex situations.
2
Review for completenessConfirm name, SSN, filing status, applicable Steps 2 to 4 entries, signature, and date. Return any incomplete form before entering it in payroll.
3
Enter in payrollVerify the 2026 tax tables are selected. Confirm the withholding looks reasonable for the filing status and pay frequency.
4
File the formStore it securely (paper or electronic) and note the date it was received and applied.
5
Set annual remindersRemind all employees in January to review their W-4, and flag any employees claiming "Exempt"; they must re-file by February 15 or lose exempt status.
6
If a lock-in letter arrivesImplement it by the date in the letter, notify the employee, and keep the letter with their W-4. Block any employee-submitted W-4 that would reduce withholding below the locked rate until the IRS releases the lock.
  • Retention: Keep each W-4 for at least 4 years after the later of the date the tax was due or the date it was paid.
  • Format: Paper or electronic storage is acceptable. Electronic systems must maintain secure access and a reliable audit trail.
  • IRS request: The IRS may ask to inspect W-4s for specific employees, typically as part of a withholding compliance review or lock-in letter process. Have a retrieval process ready.
  • Privacy: Treat W-4s as confidential payroll and tax records. Limit access to payroll and HR staff who need it.
  • Signed W-4sCurrent signed W-4 for every active employee, plus prior versions if updated mid-year (the IRS may want to see the history).
  • Payroll change logWhen each new W-4 was received and when the new settings were applied in payroll.
  • IRS correspondenceAny lock-in letters or modification letters, and documentation of your implementation timeline.
  • Exempt recordsRecord of any employee who claimed exempt status, including the date of each annual re-filing.

Common traps

Using an outdated W-4 form: The IRS released a revised 2026 W-4 with updated Child Tax Credit amounts ($2,200 per qualifying child, up from $2,000) due to tax law changes from the One Big Beautiful Bill Act. Employees who used a prior form and have dependents may be underwithholding. Make sure your onboarding materials and e-portals are using the 2026 version, and consider notifying existing employees with dependents that an update may be warranted.
Ignoring or delaying a lock-in letter: Once an IRS Letter 2800C arrives, you have a mandatory deadline, typically 60 days, to implement the specified withholding rate. After that, you cannot reduce withholding below that rate for any reason, including a new W-4 from the employee. Failure to comply makes you liable for the tax gap.

FAQs

Should we reject an incomplete W-4?
Yes. If the form is missing a signature, date, or filing status, return it to the employee for completion before entering it in payroll. Do not attempt to fill in missing fields yourself. Until a valid form is received, withhold as Single/MFS with no adjustments.

What does it mean when an employee claims "Exempt"?
Exempt means the employee is requesting zero federal income tax withholding. To qualify, they must have had no federal income tax liability in the prior year and expect none in the current year. They write "Exempt" in Step 4(c). This status expires annually; the employee must re-file a new exempt W-4 by February 15 each year. If they miss that deadline, begin withholding as Single/MFS with no adjustments until a new valid W-4 is received. You are not required to verify whether the employee actually qualifies; that is between the employee and the IRS.

What if an employee doesn't submit a W-4?
Withhold federal income tax as if the employee is Single or Married Filing Separately with no other adjustments (per IRS Publication 15-T). Apply this default from the first paycheck and continue until a valid W-4 is received.

Do we need state withholding forms too?
It depends on the state. Many states have their own withholding certificate (e.g., California's DE-4, New York's IT-2104, Oregon's OR-W-4). Others accept the federal W-4. Check with each state's department of revenue where you have employees.

  • Multiple jobs or working spouse: Employees in these situations should use the IRS Withholding Estimator or the Multiple Jobs Worksheet (included with the W-4 instructions) to calculate the right amounts for Steps 2 to 4. As the employer, you enter whatever they put on the form; you don't need to verify the math.
  • States with their own withholding form: Collect both the federal W-4 and the state form at hire wherever required. Keep them filed together per employee. States that have their own form include (among others) California, New York, Oregon, and several others; check each state's revenue agency website for the current form.
  • Remote workforce: Withholding obligations follow the employee's work location, not your office address. An employee working from home in another state may trigger that state's income tax withholding requirements and local tax obligations. Confirm requirements for each state where you have remote workers.
  • Nonresident aliens: Special withholding rules apply under IRS Publication 15 and Publication 515. Nonresident alien employees generally cannot claim exempt and have specific W-4 completion instructions; consult IRS guidance or a payroll advisor for these situations.

Download the current 2026 form directly from IRS.gov, and share the Withholding Estimator link with employees who have complex situations; it walks them through Steps 2 to 4 without requiring them to understand the underlying math.