The W-4 in 2026: What Changed and What It Does to Your Paycheck

Form W-4 tells your employer how much federal income tax to withhold from each paycheck. The 2026 version keeps the five-step layout introduced in 2020 but updates it for the One Big Beautiful Bill Act, P.L. 119-21. The changes show up mainly in Step 3 and the Step 4(b) deductions worksheet.

What changed for 2026

Area	2026 Form W-4
Step 3, children	$2,200 per qualifying child under 17; $500 per other dependent; income limit $200,000, or $400,000 married filing jointly
Step 4(b) worksheet	New lines for qualified tips (up to $25,000), qualified overtime (up to $12,500, or $25,000 married filing jointly, of the "and-a-half" portion), passenger vehicle loan interest (up to $10,000) and seniors 65+ ($6,000 each)
Standard deduction used in the worksheet	$16,100 single, $24,150 head of household, $32,200 married filing jointly
Itemized deductions	State and local taxes up to $40,400 ($20,200 married filing separately) for incomes under $505,000; new cash charity line for standard-deduction filers
Exemption	A checkbox below Step 4(c), instead of writing "Exempt"

The worksheet applies income limits to the new deductions: total income under $150,000 ($300,000 married filing jointly) for tips and overtime, under $100,000 ($200,000) for car loan interest, and under $75,000 ($150,000) for the senior amount. The deductions themselves are claimed on your tax return. Putting them on the W-4 just spreads the benefit across your paychecks instead of waiting for a refund.

The five steps

1. Step 1: Personal information and filing status. Single or married filing separately, married filing jointly, or head of household. Filing status sets the standard deduction and brackets in your employer's calculation.
2. Step 2: Multiple jobs or spouse works. Use the IRS estimator, the Multiple Jobs Worksheet (the result goes in Step 4(c)), or the checkbox if there are exactly two jobs in total.
3. Step 3: Dependents and other credits. Multiply qualifying children by $2,200 and other dependents by $500, and add other credits.
4. Step 4: Other adjustments. (a) Other income without withholding, such as interest or dividends. (b) Deductions beyond the standard deduction, from the worksheet. (c) Extra withholding per paycheck.
5. Step 5: Sign. The form isn't valid without your signature.

Complete Steps 3 through 4(b) on only one W-4 if you have several jobs. Withholding is most accurate when you use the highest-paying one.

Worked examples: one paycheck, different W-4 entries

All examples use 2026 biweekly pay of $2,000 for a single filer and the Publication 15-T percentage method.

W-4 entries	Federal tax per paycheck	Change
Step 1 only (single)	$156.15	—
Step 2 box checked	$270.19	+$114.04
Step 4(a): $10,000 of other income	$202.31	+$46.16
Step 4(b): $5,000 of expected qualified overtime	$133.08	−$23.07
Step 4(b): $6,000 senior deduction	$128.46	−$27.69
Step 4(c): $25 extra	$181.15	+$25.00

The Step 4(b) lines show why the new deductions matter for take-home pay. Our employee is in the 12% bracket, so a $5,000 deduction is worth about $600 a year in tax, or about $23 a paycheck. The 2026 W-4 lets her get it every payday rather than at filing time.

A married example shows Step 3's effect. At $3,000 biweekly, married filing jointly, withholding is $192.31 a paycheck. Claiming two children under 17 ($4,400 in Step 3) subtracts $169.23 a paycheck, leaving $23.08.

Things the W-4 doesn't change

• Social Security and Medicare. These are 6.2% and 1.45% of wages no matter what the W-4 says. Qualified tips and overtime remain subject to both.
• State withholding. Most states have their own certificate, such as California's DE 4 and New York's IT-2104.
• Supplemental wages taxed at the flat rate. If your employer withholds 22% on a bonus, the W-4 doesn't change that rate. See our bonus pay stub guide.

When to file a new W-4

• You marry, divorce or gain a dependent.
• You or your spouse start or stop a second job.
• You expect qualified tips, overtime or another new deduction, and want withholding to reflect it.
• You claimed exemption for 2026. You need a new form by February 16, 2027, or your employer withholds as single with no adjustments.

If you file mid-year, the IRS suggests using its Tax Withholding Estimator, since the W-4 assumes a full year. Have your most recent pay stub handy: the estimator asks what's been withheld so far. Your employer must apply a replacement W-4 no later than the start of the first payroll period ending on or after the 30th day after receiving it.

See your W-4 on a pay stub

Our pay stub generator applies 2026 and 2025 W-4 entries, including Steps 2, 3, 4(a), 4(b) and 4(c), and shows the withholding on a free preview before you pay. Try the Step 2 box or a Step 4(b) amount and watch the federal line change. For how the W-4 relates to year-end reporting, see W-2 vs. W-4.