What changed for 2026
The form was updated for the new deductions in the 2025 tax law. If you expect to claim them, you can now have less tax taken out of each paycheck instead of waiting for a bigger refund.
- Step 3: $2,200 for each qualifying child under 17 and $500 for each other dependent, if your total income is $200,000 or less ($400,000 married filing jointly).
- Step 4(b) Deductions Worksheet: new lines for qualified tips, qualified overtime, car loan interest and the senior deduction.
The Deductions Worksheet, line by line
| Line | What to enter (2026 form) |
|---|---|
| 1a | Qualified tips, up to $25,000, if total income is under $150,000 ($300,000 joint) |
| 1b | Qualified overtime: the "and-a-half" part of time-and-a-half pay, up to $12,500 ($25,000 joint), same income limit |
| 1c | Car loan interest on a qualifying vehicle, up to $10,000, if total income is under $100,000 ($200,000 joint) |
| 3a, 3b | $6,000 for you, and $6,000 for your spouse, if 65 or older and total income is under $75,000 ($150,000 joint) |
| 5 | Student loan interest, deductible IRA contributions and other adjustments |
| 6–14 | Itemized deductions compared with the standard deduction ($16,100 single, $24,150 head of household, $32,200 joint), and cash gifts to charity up to $1,000 ($2,000 joint) if you take the standard deduction |
| 15 | Total, which goes in Step 4(b) of the form |
The worksheet uses simple income cutoffs; the actual deductions phase out gradually above those amounts. If your income is near a limit, the IRS Tax Withholding Estimator (irs.gov/W4App) gives a better number.
Example: overtime
Single, $24 an hour, about 8 hours of overtime a week for 50 weeks. Income about $64,000.
Overtime premium: $12 × 8 × 50 = $4,800. Enter $4,800 on line 1b, and $4,800 on line 15 if nothing else applies.
Put $4,800 in Step 4(b). Your employer withholds less, about the tax on $4,800 spread over the year.
Not sure of your premium? The overtime pay calculator shows it, and the no tax on overtime calculator shows the tax it saves. For tips, use the no tax on tips calculator.
When to give your employer a new W-4
- You expect to claim the overtime, tips, car loan or senior deduction and want the savings in each paycheck.
- You married, divorced, had a child, or you or your spouse started or stopped a second job.
- You got a large refund or owed a lot last year.
Your employer may not reduce withholding for the overtime deduction until you give them an updated, valid Form W-4.
Common questions
What's new on the 2026 Form W-4? The Step 4(b) Deductions Worksheet now has lines for the new deductions: qualified tips, qualified overtime, car loan interest and the $6,000 senior deduction. Step 3 uses $2,200 per child under 17 and $500 per other dependent.
Does my employer stop withholding on overtime automatically? No. Your employer keeps withholding as before unless you give them a new Form W-4 that includes the deduction.
Where do I put no tax on overtime on the W-4? In the Step 4(b) Deductions Worksheet, line 1b: an estimate of the "and-a-half" part of your time-and-a-half pay, up to $12,500 ($25,000 married filing jointly), if your total income is under $150,000 ($300,000 joint). The worksheet total goes in Step 4(b).
Do I need a new W-4 every year? Not usually. Your old form stays in effect. Submit a new one when your situation changes, or if you want your withholding to reflect the new deductions. If you claim exemption from withholding, you must submit a new form each year.
Will claiming the deductions on my W-4 make me owe at tax time? It can if you overestimate. The form lowers withholding based on the amounts you enter, so use realistic numbers; the IRS Tax Withholding Estimator can check them.
Updated November 5, 2026. Source: IRS Form W-4 (2026), Employee's Withholding Certificate, including the Step 4(b) Deductions Worksheet; IRS guidance on withholding and the qualified overtime deduction.