What Do You Put on a W-4 for No Taxes Taken Out?

To have no federal income tax taken out of your paycheck, what you put on the W-4 depends on whether you qualify to claim exempt. If you do, you check the “Exempt from withholding” box on the 2026 form, skip Steps 2 through 4, and sign it. If you don’t qualify, you can still bring your calculated withholding to zero by entering enough credits in Step 3 and enough deductions in Step 4(b) to offset the tax your employer would otherwise take out. Claiming exempt is faster, but the IRS restricts it to people who owed no federal income tax last year and expect to owe none this year.¹

Who Can Legally Claim Exempt

Two conditions must both be true. You had no federal income tax liability for 2025, and you expect none for 2026.¹ “No liability” means the total tax on line 24 of your Form 1040 was zero, or your income was low enough you weren’t required to file at all.²

In practice, that fits students working part-time, retirees with minimal taxable income, and anyone whose total earnings stay under the standard deduction. For 2026, the standard deduction is $16,100 for single filers, $24,150 for head of household, and $32,200 for married filing jointly.³ Income under those thresholds generally means no tax liability.

Both halves of the test have to hold. Owing nothing in 2025 doesn’t help if you expect a much bigger paycheck in 2026, and expecting nothing this year doesn’t help if last year came with a tax bill. Fail either one and you don’t qualify.

How To Fill Out the 2026 W-4 for No Withholding

The 2026 form uses a checkbox for the exemption, not a written word. If you meet the two-part test:

Complete Step 1 with your name, address, and Social Security number in 1a, and your filing status in 1b.
Find the “Exempt from withholding” area between Step 4 and the signature line, and check the box.
Leave Steps 2, 3, and 4 completely blank. No dependent credits, no deductions, no extra withholding.
Sign and date Step 5. Without your signature, the form is invalid.

That checkbox tells your employer to withhold zero federal income tax from every paycheck for the rest of the calendar year.² Your employer has up to 30 days to put a new W-4 into effect, measured from the date they receive it to the start of the first payroll period ending on or after that 30th day.¹

Exempt Expires Every February

An exempt W-4 is good only for the calendar year you file it in. To continue with no federal income tax withheld in 2027, you must submit a brand-new W-4 claiming exemption by February 16, 2027.²

Miss that deadline and your employer must immediately start withholding as though you had filed as single with no adjustments, which is close to the maximum rate. You can submit a fresh exempt W-4 later, but the employer only applies it going forward and won’t refund the tax already taken from your January and early February checks.¹ Set a calendar reminder for early February if you plan to stay exempt year after year.

Zeroing Out Withholding Without Claiming Exempt

If you don’t meet the two-part test but expect your actual tax bill to be zero once credits and deductions are applied, you can use Steps 3 and 4(b) to reduce calculated withholding to nothing. This route takes more work and more accurate numbers, but it’s legitimate when the figures are honest.

The IRS offers a free Tax Withholding Estimator that walks through your income, deductions, and credits and produces the exact amounts to enter on the form. Guessing wrong here either leaves you with a surprise tax bill or opens the door to penalties.

Step 3: Credits for Dependents

Step 3 captures the child tax credit and the credit for other dependents. For 2026, the child tax credit is $2,200 per qualifying child under age 17.³ Other dependents you support (older teenagers, aging parents) count for $500 each. Add them up and put the total on line 3. That amount is subtracted directly from the tax your employer would otherwise withhold.

Step 4(b): Deductions Beyond the Standard

Step 4(b) reduces withholding to account for deductions you’ll claim on your return. The Deductions Worksheet in the W-4 instructions calculates how much your expected deductions exceed the standard deduction already baked into withholding tables, and the result goes on line 4(b).² This helps most if you itemize with significant mortgage interest, charitable giving, or state tax payments. Above-the-line items like student loan interest and IRA contributions belong here too.

When the credits in Step 3 and the deductions in Step 4(b) are large enough to erase your projected tax, the withholding calculation comes out to zero. Your paycheck loses no federal income tax, same result as the exempt checkbox, arrived at through math instead.

A Note on Step 4(a)

Step 4(a) is for other income (interest, dividends, retirement income) that has no withholding at the source. Entering an amount here increases withholding, so if the goal is zero federal tax taken out, leave it blank.²

New 2026 Deductions That Help Zero Out the Calculation

The One, Big, Beautiful Bill added three above-the-line deductions that appear on the 2026 Deductions Worksheet and can meaningfully cut withholding for tipped and overtime workers.

Qualified tips: workers in occupations that customarily receive tips (restaurants, salons, rideshare, and similar) can deduct up to $25,000 in tip income per year, with the deduction phasing out once modified adjusted gross income exceeds $150,000, or $300,000 for joint filers.⁴
Overtime compensation: the “extra half” portion of time-and-a-half pay required under the Fair Labor Standards Act is deductible up to $12,500 per year, or $25,000 for joint filers, with the same phase-out thresholds.⁴
Passenger vehicle loan interest: the 2026 W-4 references this as a new deduction category on the Deductions Worksheet, though detailed IRS guidance on limits had not been published at the time of writing.²

These deductions are available whether or not you itemize. A server earning $35,000 in wages and $15,000 in tips can use the tip deduction on the Deductions Worksheet to dramatically lower or eliminate federal withholding. Factor any that apply into your Step 4(b) figure.

What Comes Out of the Check Regardless

An exempt W-4 stops federal income tax withholding, nothing else. Social Security tax at 6.2% and Medicare tax at 1.45% still come out of every paycheck, a combined FICA rate of 7.65%.⁵ No W-4 entry changes that.

State income tax is separate too. Nothing you put on the federal W-4 affects state withholding. States with an income tax have their own forms and their own exemption rules; if you want zero state tax withheld, you have to check your state’s requirements and file the state form as well.

Penalties for Getting It Wrong

The W-4 controls what your employer takes; it doesn’t change what you actually owe. If you arrange for zero withholding and end up owing more than $1,000 at filing time, the IRS can charge an underpayment penalty.⁶ If you expect any tax at all, quarterly estimated payments usually need to fill the gap.

There’s a bigger stick for false exemption claims. Federal law imposes a flat $500 civil penalty on anyone who makes a statement on a W-4 that results in less tax being withheld when there was “no reasonable basis” for the claim.⁷ The statute adds that this fine is “in addition to any criminal penalty provided by law.” The reasonable-basis standard is your protection: honest estimates that turn out slightly off don’t trigger it. Checking exempt while knowing you’ll earn $80,000 does.

If the IRS Has Sent Your Employer a Lock-In Letter

If the IRS reviews your wage data and decides your withholding has been too low, it can send your employer a “lock-in letter” that overrides your W-4 and sets a minimum withholding level. Once it takes effect (at least 60 days after issuance), your employer cannot go below the specified withholding, no matter what W-4 you submit. You can always ask for more withholding; less requires direct IRS approval. Employers are also required to block any online W-4 system from being used to decrease withholding while the lock-in is active.⁸ If one of these is on file for you, a new exempt W-4 or a zeroed-out calculation won’t take effect until the IRS lifts the restriction.

1
Internal Revenue Service. Topic No. 753, Form W-4, Employees Withholding Certificate
2
Internal Revenue Service. Form W-4 (2026) Employee’s Withholding Certificate
3
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
4
Internal Revenue Service. How To Take Advantage of No Tax on Tips and Overtime
5
Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
6
Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty
7
Office of the Law Revision Counsel. 26 USC 6682 – False Information With Respect to Withholding
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Internal Revenue Service. Withholding Compliance Questions and Answers