Definition
The IRS form you give your employer to tell them how much federal income tax to withhold from your pay.
What it means
Form W-4, the Employee's Withholding Certificate, has five steps: personal information, multiple jobs or a working spouse, dependents and other credits, other adjustments, and your signature. Most people only need Steps 1 and 5; the rest fine-tune withholding. Since 2020 the form no longer uses allowances. You complete a new W-4 when you start a job and can submit a new one any time, for example after marriage, having a child or starting a side business. If you skip it, employers withhold as if you are single with no adjustments. The IRS offers the form in Spanish, Chinese, Vietnamese and other languages, and the Tax Withholding Estimator can suggest entries. Employees claiming exemption from withholding must file a new W-4 each year.
Example
A parent with two children under 17 who qualify for the credit may enter $4,400 in Step 3, which lowers federal withholding by about $183 a month over 24 paychecks.
Illustrative numbers only. Your situation will differ.