The IRS released the 2026 Form W-4, Employee’s Withholding Certificate, with changes due to H.R. 1, known as the One Big Beautiful Bill Act (OBBBA; Pub. L. 119-21), which was enacted in July. A draft version of the 2026 Form W-4 was released in August.
The 2026 Form W-4 increases to five pages from four pages (and includes the instructions). Changes include:
Step 3: Claim Dependent and Other Credits. The lines in Step 3 are now labeled Lines (a) and (b) and require the same information as in the 2025 form. The amount for the child tax credit was increased by the OBBBA to $2,200 from $2,000 per qualifying child.
Step 4: Other Adjustments. Step 4 no longer includes “Optional.” Step 4(b) informs employees that if the employee skips this line, withholding will be based on the standard deduction.
Deductions Worksheet. The Deductions Worksheet for Step 4(b) now has 15 lines and is on its own page.
New lines were added for employees to enter qualified tips and overtime compensation for the new tax deductions under the OBBBA. Employees can use Line 1(a) to enter an estimate of their qualified tip income and Line 1(b) to enter an estimate of qualified overtime compensation.
Exempt checkbox. A checkbox was added after Step 4 for employees to claim they are exempt from withholding. On the previous version, employees claimed exempt by writing “Exempt” in the space below Step 4(c).
Similar changes to Form W-4P
The 2026 Form W-4P, Withholding Certificate for Periodic Pension or Annuity Payments, was updated with similar changes due to the OBBBA.
Rayna Alexander, Esq., is Editor of Payroll Information Resources for PayrollOrg.
