What is a W-4 form?
A W-4 Employee’s Withholding Certificate, also known as a W-4, is a type of tax withholding document that employees complete and submit to employers for their personnel files. It includes all the information employers need to file taxes and fill out W-2s during tax season.
The current version of the W-4 (revised in 2020) no longer uses withholding allowances. Instead, employees provide filing status, information about multiple jobs, dependents and other adjustments to help determine accurate withholding. Employees may submit an updated W-4 if their tax situation changes.
What is the purpose of a W-4?
W-4 forms allow employers to make accurate payroll deductions and withhold the correct amount of income tax from employees’ paychecks. Businesses deposit withheld payroll taxes to the IRS on a schedule that may be monthly or semiweekly, depending on their deposit status.
“Completing the W-4 correctly at the start can support compliance and help maintain an effective payroll process. Accurate withholding may also reduce the likelihood of unexpected issues at year-end for both the business and the employee.”
—Ashlee Malet, MBA in accounting
Parts of a W-4
The W-4 has five steps and gives employers the information they need to calculate federal income tax withholding. If you hire someone who has never filled out a W-4, guiding them through the process is important.
The following are the main parts of a W-4:
Step 1: Personal information
The upper section of the form contains lettered fields for the employee’s contact information:
- Name and current home address: The employee’s full legal name and a current address where you can send their W-2.
- Social Security number: An employee without a Social Security number can submit a W-4 by completing Form SS-5 to register for a Social Security card.
- Filing status: Employees mark the correct filing status box to indicate single, married filing separately, married filing jointly or head of household. The IRS has an online tool to help your employees determine their filing status.
Step 2: Other wages
An employee’s total income can influence the amount employers are required to withhold. Employees with multiple incomes or those filing jointly with another employed person complete step 2. Employers can supply the IRS Multiple Jobs Worksheet to help them complete this section. They can use the worksheet or an online estimator to determine their extra withholding amount in the field in step 4(c).
Some employees may leave this step blank if your company is their sole source of income.
Step 3: Dependents
Employees who meet certain income criteria and have qualifying dependents may be able to claim a tax credit in this step. As of 2025, employees can get a tax credit of $2,200 per qualifying dependent younger than 17 and $500 per other dependent, though these amounts may change based on IRS updates. This section may also be left blank.
Step 4: Other
Employees can fill out three fields to share miscellaneous income and other deductions:
- Non-work income, such as interest and retirement income
- Other deductions from the IRS Deductions Worksheet
- Extra withholding from Step 2 and any additional amount the employee wants withheld
Step 5: Signature
The IRS requires employees to sign and date their W-4 for it to be valid. Employers should complete the employer sections of Form W-4 with the business name, address, EIN, and first date of employment, as applicable.
When do employees need to complete the W-4?
Employees typically complete their W-4 before receiving their first paycheck for accurate tax withholding. According to the IRS, a revised W-4 must take effect no later than the first payroll period ending on or after the 30th day after the employer receives it.
If a new employee does not submit a properly completed W-4, you may need to withhold as if the employee were single or married filing separately with no entries in Steps 2 through 4.
W-4 filing requirements
The IRS requires employers to keep employee W-4s on file for at least four years, and some states have additional requirements. They may request copies of an employee’s W-4 in the event of an audit or issues with the withholding amount. The IRS allows employers to keep employee W-4s electronically or as paper records.
After the legal retention period ends, safely dispose of employee tax information in accordance with the Fair and Accurate Credit Transactions Act. The FTC recommends that employers shred or burn all tax documents and permanently delete electronic files.
Making changes to a W-4
If an employee wants to change their withholding, personal information, or filing status, they must complete a new W-4. After receiving a new W-4, employers can adjust the withholding amount in their payroll system accordingly. You may be required to keep both their original and updated W-4s until the four-year holding period ends.
Accurately completing the W-4 form is important for correct tax withholding and IRS compliance. By guiding employees through the process, retaining records for at least four years and encouraging updates when situations change, you may support smooth payroll and help prevent unexpected tax issues at year-end.
