In case you haven’t heard, the W-4, or Form W-4 has been updated for 2025. What does this mean for employers? Fortunately, not much has changed. And, the IRS is not requiring all employees to complete the revised form.
What is a W-4 Tax Form?
The W-4 tax form, officially known as the Employee’s Withholding Certificate, is a critical document in the payroll and tax compliance process. Employees complete this form when they begin a new job or need to adjust their tax withholding due to changes in their financial or personal circumstances, such as marriage, the birth of a child, or an additional job.
The information provided on the W-4 enables employers to calculate the correct amount of federal income tax to withhold from an employee’s paycheck, ensuring compliance with IRS regulations and preventing overpayment or underpayment of taxes.
History of the W-4
The federal income tax is a pay-as-you-go tax: you must pay the tax as you earn or receive income during the year. Employees use Form W-4 to let their employer know the amount to withhold and pay for federal income taxes on each paycheck. An employee’s elections on Form W-4 provide the employer with the factors needed to accurately calculate withholding. If an employee does not correctly fill out a W-4, too little tax may be withheld and result in the person owing tax to the IRS when they file their individual return, including potential penalties. If too much federal tax is withheld per paycheck, the individual will overpay the IRS and will receive a refund at the end of the tax year.
For decades, the basis of federal income tax withholding from employees has been marital status and number of allowances. Employees and employers formerly used terminology such as “Married-3” or “Single-2.” But those designations changed in 2017 when Congress eliminated withholding allowances as the basis for federal income tax calculation. Today, Form W-4 aligned the employee’s withholding elections with the language in federal tax code. Taxpayers whose income is under $400,000 (married filing jointly) or $200,000 (other filing statuses) must multiply the number of qualifying children under 17 by $2,000 and any other dependents by $500 and enter those dollar figures on the form.
What Changed for Employees?
Not much. The IRS doesn’t require employers to update all existing employees to 2025 W-4 forms. However, if an employee wanted to make any changes to their federal withholding elections in 2025, they’ll have to use the new form.
Form changes for the year include:
- The general instructions on page two include more instances when you’d want to use the estimator, including
- If you are submitting the form after the beginning of the year
- If you have changes during the year in your marital status, number of jobs, or number of dependents
- The above information is also added as a tip between steps one and two on the first page of the form.
- The annual taxable wage numbers have been adjusted, as they are each year, to account for inflation.
If it’s been a while since an employee has completed a W-4, it’s important to note that the 2017 Tax Cuts and Jobs Act made some significant updates to the tax code, one of which was to nearly double the standard deduction (from $6,500 to $12,000 for single filers and from $13,000 to $24,000 for joint filers). The standard deductions have increased for 2025, as shown in the table below.
| Filing Status | 2024 Tax Year | 2025 Tax Year |
| Single | $14,600 | $15,000 |
| Married, filing jointly | $29,200 | $30,000 |
| Married, filing separately | $14,600 | $15,000 |
| Head of household | $22,900 | $22,500 |
How to Fill out a W-4 Form
The 2025 form is intended to be easier for employees to fill out and to accurately tell their employers how much federal income tax they want withheld from their pay.
Employees can elect to withhold federal income taxes based on marital status alone if married and not filing jointly with their spouse who is also employed. To do this, the employee completes only the first step (Enter Personal Information) with their name, address, Social Security number, and filing status, and step five where they sign and date the form. The result should be less confusion and less time spent navigating the form. It is within optional steps two through four on the redesigned Form W-4 where the changes begin.
Marital Status Box
Married taxpayers or taxpayers who have dependents or more than one job need to do a little more work. Step two asks the employee to specify whether they hold multiple jobs or have a spouse who is also employed.
If the answer is “yes,” they have to complete step two, and then fill out steps three and four for just one of the jobs (for the most accurate calculation, the IRS says to use the highest paying job). In step 2a of the 2025 Form W-4, the IRS helpfully provides a Tax Withholding Estimator calculator to guide employees through the process of estimating their withholdings.
The calculator:
- Accounts for credits and deductions
- Estimates whether the taxpayer will owe or receive a refund based on current withholdings and the amount of tax owed for the rest of the year
- Provides guidance for the steps to take if the taxpayer wants a tax refund or if they’d rather get the amount owed as close to zero as possible
To use the calculator, information from the employee’s pay stubs and prior year tax return should be gathered including:
- Total amount of wages expected to be paid for the year
- Amount of any bonuses
- Total federal income tax withheld
- Amount of income tax withheld from the last paycheck
Step three is where the employee can claim dependent exemptions and deducts the $2,000 per-child tax credit out of their withholding ($500 for non-child dependents). And step four is where employees can make additional adjustments, including having tax withheld for additional income (e.g., interest, dividends, or retirement income) or calculate if they choose to itemize their deductions at tax time rather than using the standard deduction.
Frequently Asked Questions
Still have questions regarding Form W-4? Here are some quick answers.
Is There a New W-4 for 2025?
Yes. However, Form W-4 has largely stayed the same since the overhaul in 2020. Changes made are minor and for informational purposes.
What is a 2025 W-4 Form for?
Employees use Form W-4 to let their employers know the amount they’d like withheld to pay for federal income taxes on each paycheck. An employee’s elections on Form W-4 provide the employer with the factors needed to accurately calculate withholding.
Should You Fill Out a New Form W-4?
It’s not necessary to fill out a new Form W-4 if your financial situation has remained the same. However, if you’ve married, divorced, had children, changed jobs, or added a job, it’s important to fill out a new form to ensure your withholding is correct.
How Paycor Helps
We’re proud to keep more than 30,000 organizations informed and compliant with federal and state laws and regulations. Since 1990, Paycor has maintained a core expertise in payroll and compliance. We established our compliance expertise in the Cincinnati tri-state area, one of the most complex tax jurisdictions in the country, which is why we’re able to handle payroll and tax complexities in a way our competitors can’t. If you’re a Paycor customer and still have unanswered questions, please contact your payroll specialist for more support.
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