Form W-4 is an IRS form used by employees to tell employers certain information used to figure federal income tax withholding. If an employee fails to complete a form, then employers withhold taxes as if the employee were single without any special withholding requests. Typically, the form is completed when onboarding a new employee. It continues to be the basis for withholding unless a new form is submitted. Due to tax law changes or personal events, an employee may want to submit a new form that will have the effect of increasing or decreasing withholding.
What do employers need to know about dealing with Form W-4?
There’s a revised Form W-4 for 2026
The employee’s withholding certificate—Form W-4—has been revised for 2026. The deductions worksheet that employees can use to enter certain deductions that will reduce their withholding now includes the new deductions from the One Big Beautiful Bill Act for:
- Qualified tips
- Qualified overtime compensation
- Qualified passenger vehicle loan interest
- Seniors age 65 or older (the senior bonus deduction)
- Cash gifts to charities (for those who do not itemize)
The form still allows for adjustments due to itemized deductions or the standard deduction. These were the only adjustments on the 2025 version of the form.
If current employees do not submit a new W-4 to have any of these new deductions factored into their withholding, then employers withhold as they had previously done on employees’ gross pay. For example, employers do not have to take qualified tips into account on their own for withholding purposes; it’s up to employees to specify this.
Watch the deadline for exemption from withholding
An employee who had no federal tax liability last year and expects none this year may claim exemption from federal income tax withholding. But this isn’t automatic; exemption must be claimed. This is an annual claim. For 2026, the deadline for claiming exemption from federal income tax withholding is February 17, 2026 (February 15 is a Sunday and February 16 if Presidents Day).
In the past, an employee claiming exemption had to write “Exempt” below Step 4(c). Now, there’s a check box for this purpose.
Can W-4s be submitted electronically?
Yes, if there’s a system in place to handle this. The IRS has 5 conditions for using an electronic submission system:
- The electronic system must ensure that the information received by you is the information sent by the employee or payee. The system must document all occasions of user access that result in a submission. In addition, the design and operation of the electronic system, including access procedures, must make it reasonably certain that the person accessing the system and submitting the form is the person identified on the form.
- The electronic system must provide exactly the same information as the paper form.
- The electronic submission must be signed with an e-signature by the employee or payee whose name is on the form. The e-signature must be the final entry in the submission.
- Upon request, you (the employer) must furnish a hard copy of any completed electronic form to the IRS and a statement that, to the best of your knowledge, the electronic form was submitted by the named employee or payee. The hard copy of the electronic form must provide exactly the same information as, but need not be a facsimile of, the paper form. For Form W-4, the signature must be under penalty of perjury and must contain the same language that appears on the paper version of the form. The electronic system must inform the employee that they must make a declaration contained in the perjury statement and that the declaration is made by signing the Form W-4.
- You (the employer) must also meet all recordkeeping requirements that apply to the paper forms.
Can employees change their withholding during the year?
Yes. They can submit a revised W-4 for any reason at any time. For example, if an employee with any of the new deductions mentioned above failed to submit a new W-4 for 2026 by the end of 2025, they can do so now or any time during the year.
A new W-4 may also be advisable if:
- There’s a change in personal circumstances—marriage or divorce
- An additional job is obtained
- Personal choice in having additional withholding due to investments or other taxable resources. This can avoid the need to pay estimated taxes.
An employee may request “extra withholding.” This is a specific dollar amount to be withheld in each pay period. Usually, this is done late in the year by employees with outside income from investments or other sources that want to cover their taxes without having to pay or increase their estimated taxes.
The new withholding becomes effective for the first pay period ending on or after the 30th day from the date the new W-4 is received. But employers can implement the change sooner.
Final thought
Employers don’t have to advise employees about completing their W-4. But they can suggest that employees use an IRS Tax Withholding Estimator to determine how to complete the form.
Additional information about income tax withholding can be found in this list of blogs.
