W-4 Withholding Calculator 2026
Enter your income details to see recommended W-4 settings and estimated refund.
Your Income
Current Withholding
Estimated Refund
$5,040
Estimated tax: $7,960 · Annual withholding: $13,000
Monthly Over
$420/mo
Ideal per Paycheck
$306
Tax Calculation
Recommended W-4 Settings
Your W-4 can stay simple — just sign Steps 1 and 5.
Disclaimer
- This is a simplified federal withholding estimate for 2026.
- Does not include state taxes, FICA, or all tax credits/deductions.
- For the official IRS tool, use the Tax Withholding Estimator at irs.gov.
What Is the W-4 Form?
The W-4 (Employee's Withholding Certificate) tells your employer how much federal income tax to withhold from each paycheck. Get it right and you'll neither owe a large tax bill nor give the government an interest-free loan through excessive withholding.
How the New W-4 Works (2020 and Later)
The IRS redesigned the W-4 in 2020, eliminating "allowances." The new form has five steps:
- Step 1: Personal information and filing status
- Step 2: Multiple jobs or spouse works (checkbox or worksheet)
- Step 3: Dependent credits ($2,000 per child under 17, $500 for other dependents)
- Step 4: Other adjustments — other income, deductions, extra withholding
- Step 5: Sign and date
When to Update Your W-4
Life changes affect your tax situation. Update your W-4 when you:
- Get married or divorced
- Have a baby or adopt a child
- Start a second job or side hustle
- Get a significant raise
- Buy a home (mortgage interest may affect itemized deductions)
- Experience a large refund or tax bill
W-4 Step 3 — Dependent Credits (2026)
| Dependent Type | Credit per Dependent | Age Requirement |
|---|---|---|
| Child under 17 | $2,000 | Under 17 at year-end |
| Other dependents | $500 | Any age (qualifying relative) |
Enter the total credits in Step 3 of your W-4 to reduce withholding. For example, two children under 17 and one qualifying relative: $2,000 × 2 + $500 = $4,500.
Big Refund vs $0 Refund — Which Is Better?
A big refund might feel good, but it means you overpaid throughout the year. That money could have been in your savings account earning interest, paying down debt, or invested. Ideally, aim for a small refund ($100-$500) or close to $0 — just enough to avoid underpayment penalties.
Underpayment Penalty
If you owe more than $1,000 at filing time and haven't paid at least 90% of your current year's tax (or 100% of last year's tax), the IRS may charge an underpayment penalty. Increase your withholding if you expect to owe significantly.
IRS Tax Withholding Estimator (Official Tool)→Frequently Asked Questions
Can I claim "exempt" on my W-4?
You can claim exempt only if you had no tax liability last year AND expect no tax liability this year. This is rare for most workers. If you wrongly claim exempt and owe taxes, you could face penalties.
What if my spouse also works?
Check the box in Step 2 or use the IRS multiple jobs worksheet. Without this adjustment, both employers withhold as if each job is your only income, which often leads to underwithholding.
How many allowances should I claim?
The current W-4 no longer uses allowances. If you have an older W-4 on file, it still works, but consider updating to the new form for more accurate withholding.
For your complete take-home pay breakdown, use our Paycheck Calculator.
Download the 2026 W-4 Form (PDF)→