Form W-4 for Employers: Collecting, Applying and Keeping Employees' Withholding Certificates

By Web Asset House Studio · October 29, 2026

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How we wrote this: A summary of section 9 and the recordkeeping section of IRS Publication 15 (Circular E), Employer's Tax Guide, for 2026, plus the IRS About Form W-4 and Tax Withholding Estimator pages (all linked below), checked October 29, 2026. This is general information, not tax or payroll advice.

Form W-4 is the employee's form, but the rules for handling it are the employer's. If you've just hired your first employee, this is the part of Publication 15 that tells you what to do with the W-4 once it's in your hands.

New hires: get a signed W-4

Publication 15 says to ask all new employees for a signed Form W-4 when they start work and to make it effective with the first wage payment. You should have a W-4 on file for each employee.

If a new hire doesn't give you one, Publication 15 says to withhold as if they had checked Single or Married filing separately in Step 1(c) and made no entries in Steps 2, 3 or 4. That applies to rehires who don't furnish a new form, too. (Employees paid wages before 2020 who never furnished a W-4 are treated under the old 2019 rules; see Publication 15 for that case.)

You may set up a system to receive W-4s electronically; Publication 15 points to Regulations section 31.3402(f)(5)-1(c) and Publication 15-T for the requirements.

When a new or replacement W-4 takes effect

An existing W-4 from 2025 or earlier stays in effect for 2026 unless the employee gives you a new one. Employees don't have to refile each year.
When an employee gives you a replacement, begin withholding under it no later than the start of the first payroll period ending on or after the 30th day after you received it.
Don't adjust withholding for pay periods before the new form's effective date.
A W-4 that makes a change for next calendar year doesn't take effect in the current year.

What employees can and can't ask for

Publication 15 says withholding must be based on filing status, income (including other jobs), deductions and credits. Employees can't base it on a flat dollar amount or percentage, but they can add an extra fixed amount per pay period on top of the calculated withholding.

Two other points from Publication 15:

Employees married filing jointly with a working spouse, or with more than one job, should complete Step 2.
Don't accept extra withholding or estimated tax payments from employees outside the W-4. If they need more withheld, they submit a new W-4, and can pay estimated tax themselves if needed. (Tips have a separate procedure.)

You can point employees to the IRS Tax Withholding Estimator, which can produce a pre-filled W-4. Publication 15 suggests reminding anyone who changed withholding mid-year to revisit the estimator in early January and submit a new W-4 for the year.

Exempt from withholding: the February 15 rule

An employee can generally claim exemption from federal income tax withholding if they had no income tax liability last year and expect none this year. Wages are still subject to Social Security and Medicare taxes.

An exempt W-4 is good only for the calendar year it's given. To stay exempt, the employee must give you a new W-4 by February 15. If they don't, start withholding as Single or Married filing separately with no other entries. A new exempt W-4 received on February 16 or later applies to future wages only; don't refund tax withheld while exempt status wasn't in place.

Invalid and substitute forms

Invalid W-4s. Any unauthorized change or addition makes a W-4 invalid, including removing the certification language, as does a form the employee clearly indicates is false when they hand it in. Publication 15 also lets you treat a form as invalid if the employee wrote "exempt" and also checked Step 2(c) or entered amounts in Steps 3 and 4. If you get one:

Don't use it. Tell the employee it's invalid and ask for another.
If you have an earlier valid W-4 for them, keep withholding under it.
If not, withhold as Single or Married filing separately with no other entries.

Publication 15 notes that an employee who submits a false W-4 may be subject to a $500 penalty.

Substitute forms. You may use your own version of the W-4, but it must contain language identical to the official form, meet IRS substitute-form rules, and come with all the current form's tables, instructions and worksheets. You can't accept a substitute form an employee created themselves.

IRS lock-in letters

The IRS may send you a notice (often called a lock-in letter) specifying an employee's permitted filing status and withholding. Publication 15 says to:

give the employee their copy within 10 business days if they still work for you;
start withholding under the notice on the date it specifies, not immediately;
ignore any later W-4 that would reduce withholding below the notice, unless the IRS tells you otherwise. A later W-4 that results in more withholding must be used.

The IRS can also ask you to make original W-4s available or send copies.

Recordkeeping

Publication 15 says to keep all employment tax records for at least 4 years, including copies of employees' Forms W-4 (and W-4P, W-4R, W-4S and W-4V). Our record retention guide covers the rest of the payroll file, and Form 941 is where the withheld tax gets reported.

Quick checklist

Signed W-4 from every new hire, effective with the first paycheck.
No W-4? Withhold as Single/MFS with no adjustments.
Replacement W-4s in effect by the first payroll period ending on or after day 30.
Exempt employees: new W-4 by February 15 each year.
Reject invalid or employee-made forms; follow any IRS lock-in letter.
Keep W-4s at least 4 years.