Form W-4 is crucial to employee tax reporting and employer withholding. Even though there have been no meaningful updates since 2020, many employees don’t know how to fill out Form W-4 correctly—which can lead to an unpleasant surprise when a substantial tax bill comes due.
So, here’s a step-by-step guide to filling out Form W-4 in 2022, including what it is and who’s required to complete it.
What is Form W-4?
Form W-4—also known as Employee’s Withholding Certificate—is an IRS tax document that is used by employers to determine how much of an employee’s wages to withhold from each paycheck for income taxes.
Employers calculate payroll taxes based on an employee’s W-4 and make state and federal tax payments on the employee’s behalf. Filling out Form W-4 incorrectly could result in substantial tax obligations—plus penalties and interest—when an employee files their annual tax return, which depends on an employer-provided Form W-2.
Employees can also choose to have additional taxes withheld from their wages—particularly if they hold multiple jobs, if they receive income from self-employment, or if their spouse also earns income.
Download a fillable PDF copy of Form 2021 W-4 (updated for 2022) here.
Who is Required to Fill Out Form W-4?
According to the IRS, employers are “required by law to withhold employment taxes from their employees,” but the responsibility for filling out Form W-4 correctly belongs to the employee, not the employer. Specifically, new hires must complete Form W-4 before they can receive their first paycheck. To stay compliant, most employers provide Form W-4 during onboarding, along with Form I-9.
If an employee already has a Form W-4 on file with their employer, they do not need to complete a new one each year, even when the IRS redesigns the form—as it did in 2020. Employers may continue to calculate income tax withholdings based on an employee’s most recent 2021 W-4 form.
However, employees should review—and update, if needed—their W-4 withholding information whenever they experience a life event that affects their financial situation, such as a marriage or divorce, the birth of a child, or starting another job.
How Has Form W-4 Changed for 2022?
Essentially, there have been no meaningful changes to Form W-4 since the major redesign in 2020.
The 2022 version of Form W-4 reflects the significant changes made in 2020, including:
- fewer lines to complete.
- no option to lower withholding by using personal allowances.
- the option to lower withholding by claiming dependents.
- the option to lower withholding by using a deductions worksheet.
How to Fill Out Form W-4 in 2022
Since 2020, filling out Form W-4 is essentially a five-step process.
Only Steps 1 and 5 are required for all workers, but responding to Steps 2-4—if they apply to an employee’s particular situation—can ensure more accurate withholding with regards to an employee’s tax liability. The General Instructions on Page 2 of the form provides more information on each step, privacy, who can claim exemption, and when to use the online estimator. For multiple-job situations, the employee should fill out Steps 3-4 for the highest paying one and leave those steps blank on the other W-4s.
The five steps include:
Step 1: Enter Personal Information
The employee should enter their full name, social security number, address, and filing status: single or married filing separately, married filing jointly or qualifying widow(er), or head of household.
Step 2: Multiple Jobs or Spouse Works
The employee should complete this step only if they hold multiple jobs—including freelance income—or if their spouse also works.
To calculate the accurate withholding amount in this step, employees should do only one of the following:
–use an estimator at irs.gov/w4app (which will also be used for Steps 3-4), OR
–use the Multiple Jobs Worksheet on page 3 of the form, OR
–check the box on Step 2 if there are only two total jobs. (This box should also be checked on the W-4 for the other job.)
Step 3: Claim Dependents
To claim dependents, an employee’s total income should be $200,000 or less if filing as an individual—or $400,000 or less if married and filing jointly.
If applicable, employees should multiply the number of qualifying children (age 17 and under) by $2,000 and multiplying the number of other dependents by $500. They should add those dollar amounts and enter the total on line 3.
Step 4: Other Adjustments
In this optional section, an employee can indicate whether they want to withhold more or less from their paycheck by listing other income, deductions other than the standard deduction, or an extra amount to withhold per pay period.
For example, an employee may choose to report passive income from interest, dividends, or retirement in this section to decrease their liability on their annual individual tax return.
To reduce their withholding, an employee may also choose to claim deductions other than the standard deduction—which is $12,950 for single and married filers (filing separately), $25,900 for married filers (filing jointly), and $19,400 for heads of household in 2022.
The IRS has provided a Deductions Worksheet on page 3 to help filers determine the most accurate withholding amount.
Step 5: Sign Here
The last step for employees is self-explanatory: they should sign and date the form.
