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Exemption From Withholding: Withholding and Estimated Tax (2026 IRS Guide)

This guide covers “Exemption From Withholding” within withholding and estimated tax. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 505 (2026), Tax Withholding and Estimated Tax, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Context for these rules

Income tax is withheld from the pay of most employees. Your pay includes your regular pay, bonuses, commissions, and vacation allowances. It also includes reimbursements and other expense allowances paid under a nonaccountable plan. See Supplemental Wages, later, for definitions of accountable and nonaccountable plans.

If your income is low enough that you won’t have to pay income tax for the year, you may be exempt from withholding. This is explained under Exemption From Withholding, later.

You can ask your employer to withhold income tax from noncash wages and other wages not subject to withholding. If your employer does not agree to withhold tax, or if not enough is withheld, you may have to pay estimated tax, as discussed in chapter 2.

Exemption From Withholding

If you claim exemption from withholding, your employer won’t withhold federal income tax from your wages. The exemption applies only to income tax, not to social security or Medicare tax.

You can claim exemption from withholding for 2026 only if both of the following situations apply.

  • For 2025, you had a right to a refund of all federal income tax withheld because you had no tax liability.

  • For 2026, you expect a refund of all federal income tax withheld because you expect to have no tax liability.

Use Figure 1-A to help you decide whether you can claim exemption from withholding. Don’t use Figure 1-A if you:

  • Are 65 or older,

  • Are blind,

  • Will itemize deductions on your 2026 return, or

  • Will claim any tax credits on your 2026 return.

These situations are discussed later.

Students.

If you are a student, you are not automatically exempt. If you work only part time or during the summer, you may qualify for exemption from withholding.

Example 1.

You are a high school student and expect to earn $2,500 from a summer job. You don’t expect to have any other income during the year, and your parents will be able to claim you as a dependent on their tax return. You worked last summer and had $375 federal income tax withheld from your pay. The entire $375 was refunded when you filed your 2025 return. Using Figure 1-A, you find that you can claim exemption from withholding.

Figure 1-A. Exemption From Withholding on Form W-4

Figure 1-A. Exemption From Withholding on Form W-4

Summary: This is a flowchart used to determine if the taxpayer is allowed to claim exemption from withholding on his Form W-4.

Start

Decision (1)

For 2025 , did you have a right to a refund of ALL federal income tax withheld because you had NO tax liability?

  • IF Yes Continue To Decision (2)
  • IF No Continue To Process (a)

Process (a)

You CAN’T claim exemption from withholding.

  • Continue To End

Decision (2)

For 2026, will someone (such as your parent) be able to claim you as a dependent?

  • IF Yes Continue To Decision (4)
  • IF No Continue To Decision (3)

Decision (3)

Will your 2026 total income be more than the amount shown below for your filing status?

  • Single: $16,100
  • Head of household: 24,150
  • Married filing separately for BOTH 2025 and 2026 : 16,100
  • Other married status (include BOTH spouses’ income whether filing separately or jointly): 32,200
  • Qualifying surviving spouse: 32,200
  • IF Yes Continue To Process (a)
  • IF No Continue To Process (b)

Process (b)

You CAN claim exemption from withholding.

  • Continue To End

Decision (4)

Will your 2026 income be more than $1,350?

  • IF Yes Continue To Decision (5)
  • IF No Continue To Process (b)

Decision (5)

Will your 2026 income include more than $450 of unearned income (interest, dividends, etcetera)?

  • IF Yes Continue To Process (a)
  • IF No Continue To Decision (6)

Decision (6)

Will your 2026 total income be $16,100 or less?

  • IF Yes Continue To Process (b)
  • IF No Continue To Process (a)

End

Example 2.

The facts are the same as in Example 1, except that you also have a savings account and expect to have $475 interest income during the year. Using Figure 1-A, you find that you can’t claim exemption from withholding because your unearned income will be more than $450 and your total income will be more than $1,350.

.You may have to file a tax return, even if you are exempt from withholding. See Pub. 501 to see whether you must file a return..

.Age 65 or older or blind. If you are 65 or older or blind, use Worksheet 1-1 or Worksheet 1-2 to help you decide whether you can claim exemption from withholding. Don’t use either worksheet if you will itemize deductions or claim tax credits on your 2026 return. Instead, see Itemizing deductions or claiming credits next..

Itemizing deductions or claiming credits.

If you had no tax liability for 2025, and you will:

  • Itemize deductions, or

  • Claim a tax credit,

use Worksheet 2-1 (also, see chapter 2) to figure your 2026 expected tax liability. You can claim exemption from withholding only if your total expected tax liability (line 11c of the worksheet) is zero.

Claiming exemption from withholding.

To claim exemption, you must give your employer a Form W-4. Check the box on the form in the space marked “Exempt from withholding” below Step 4(c) and complete Steps 1(a), 1(b), and 5. Don’t complete any other steps.

If you claim exemption but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4 within 10 days after the change. If you claim exemption in 2026 but you expect to owe income tax for 2027, you must file a new Form W-4 by December 1, 2026.

Your claim of exempt status may be reviewed by the IRS. See IRS review of your withholding, earlier.

An exemption is good for only 1 year.

You must give your employer a new Form W-4 by February 15 each year to continue your exemption.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.

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