How to Fill Out Step 3 on W-4: Lines 3(a), 3(b), and Total

To fill out Step 3 on your W-4, count your qualifying children under age 17 and multiply by $2,200, count your other dependents and multiply by $500, add any other tax credits you expect to claim for the year, and write the total in the box on Line 3. Your employer uses that figure to reduce the federal income tax withheld from your remaining paychecks, so accurate numbers keep more of your money in each check instead of tied up until you file.¹

Check Your Income Before You Enter Anything

The Step 3 credits are only available in full if your total expected income for the year is at or below:

$200,000 for single filers, heads of household, and other non-joint statuses
$400,000 for married couples filing jointly

Above those thresholds, the credit drops by $50 for every $1,000 of income over the limit. A married couple earning $420,000 with two qualifying children would normally get $4,400 in child tax credits, but the $20,000 of excess income cuts that by $1,000, leaving $3,400.²

If your income is high enough that the phase-out wipes out the credit entirely, leave Step 3 blank. Writing in a number you will not actually receive at tax time causes under-withholding and a bill in April.

Who Goes on Line 3(a): Qualifying Children

Line 3(a) is for children under age 17 as of December 31 of the tax year who are your dependents and have a valid Social Security number issued before your return’s due date. Each one is worth $2,200 for 2026.¹³

The child must also be your son, daughter, stepchild, foster child, sibling, or a descendant of any of those (a grandchild or niece, for example); must have lived with you more than half the year; and must not have provided more than half of their own support. The SSN requirement is strict. An ITIN or ATIN does not qualify a child for this credit.

Multiply the number of qualifying children by $2,200 and put the result on Line 3(a). Three qualifying children come to $6,600.

Who Goes on Line 3(b): Other Dependents

Line 3(b) is worth $500 per dependent and covers people who are your dependents but do not fit the under-17 rule. Common examples:

Your children who are 17 or older at year-end
A parent, grandparent, or other relative you financially support
An unrelated person who lived with you the entire year and qualifies as your dependent

The dependent must be a U.S. citizen, U.S. national, or U.S. resident alien. A qualifying relative also has to earn less than the IRS gross income limit for the year — roughly $5,300 for 2026, adjusted for inflation. This $500 credit is nonrefundable: it can zero out tax you owe but will not generate a refund by itself.⁴⁵

Multiply the count by $500 and write the result on Line 3(b). Supporting an elderly parent and a 20-year-old college-student dependent would put $1,000 on this line.

Adding Up the Total on Line 3

Add Lines 3(a) and 3(b) together, then add any other tax credits you reasonably expect to claim on your return. The W-4 instructions let you include estimates for credits such as the foreign tax credit and education credits like the American Opportunity Credit or Lifetime Learning Credit. Put the combined figure in the box on the right side of Step 3.¹

Be conservative with the “other credits” estimate. Overstating it means your employer withholds too little across the year, and you make up the difference at tax time. Only include credits you are confident you will qualify for.

If You Have Multiple Jobs or a Working Spouse

Complete Step 3 on only one W-4 per household, and use the form for the highest-paying job. Leave Step 3 blank on every other W-4. Claiming the same dependents on two forms tells both employers to reduce withholding for those credits, and you end up under-withheld across the year.¹

If dividing withholding across multiple jobs feels uncertain, the IRS Tax Withholding Estimator at apps.irs.gov walks through the calculation and generates a pre-filled W-4 for each job.

Turning the Form In

Give the completed W-4 to your employer, not the IRS. Many employers accept it through an online payroll or HR portal; others take a paper copy in payroll or HR. Changes usually show up within one or two pay periods. Confirm with payroll that the update went through, and keep a copy for yourself in case a later paycheck looks off.

When to Redo Step 3

The IRS requires a new W-4 within 10 days if you no longer expect to qualify for a child tax credit you previously claimed, or if other credits you included on a prior W-4 drop by more than $500.⁶

Outside that mandatory rule, update Step 3 when:

A child turns 17. That child leaves Line 3(a) but can still count for $500 on Line 3(b) if they remain your dependent.
You have or adopt a child. Add $2,200 to Line 3(a).
A dependent moves out or becomes self-supporting and you can no longer claim them.
You marry or divorce, which changes both filing status and the phase-out threshold.
You get a raise that pushes you past $200,000 or $400,000.

Skipping an update after losing a credit means your employer keeps withholding too little, and the shortfall (plus a possible penalty) comes due when you file.

Avoiding an Underpayment Penalty

Overclaiming in Step 3 pushes your withholding below what you actually owe. If the gap is big enough, the IRS adds an underpayment penalty. The rate for the first quarter of 2026 is 7%.⁷

You avoid the penalty by meeting either safe harbor:⁸

Withholding and estimated payments cover at least 90% of your 2026 tax.
Withholding and estimated payments equal at least 100% of your 2025 tax (110% if your 2025 adjusted gross income was more than $150,000, or more than $75,000 if married filing separately).

No penalty applies if your total tax owed after withholding and credits is less than $1,000. If any of your Step 3 numbers feel like a guess, run them through the IRS Tax Withholding Estimator before submitting the form so a shortfall shows up now rather than in April.

1
IRS.gov. Form W-4 (2026) Employee’s Withholding Certificate
2
Office of the Law Revision Counsel. 26 USC 24 – Child Tax Credit
3
Office of the Law Revision Counsel. 26 USC 24 – Child Tax Credit
4
Internal Revenue Service. Understanding the Credit for Other Dependents
5
Internal Revenue Service. Dependents
6
Internal Revenue Service. Publication 505, Tax Withholding and Estimated Tax
7
Internal Revenue Service. Quarterly Interest Rates
8
Office of the Law Revision Counsel. 26 USC 6654 – Failure by Individual to Pay Estimated Income Tax