Form W-4 for 2026: the deductions worksheet is where the change is

• Lines 1a to 1c: qualified tips, the “and-a-half” portion of overtime and passenger vehicle loan interest, each with the income limits for the deduction.
• Lines 3a and 3b: $6,000 for each spouse aged 65 or over, with income under $75,000 ($150,000 joint).
• Line 6b: state and local taxes up to $40,400 ($20,200 married filing separately) for income under $505,000.
• Line 6d: charitable gifts above 0.5% of income; line 12: up to $1,000 ($2,000 joint) of cash gifts for those taking the standard deduction.
• Line 9: itemized deduction limit thresholds of $768,700 joint, $640,600 single or head of household and $384,350 married filing separately.
• Line 11: standard deduction of $32,200 joint, $24,150 head of household and $16,100 single.

The Form 941 instructions tell employers to use employees’ updated W-4s so the tips and overtime deductions reach each paycheck. The IRS also posted guidance in September 2025 on updating withholding for the 2025 law changes.

• Tipped employees and hourly staff who work regular overtime.
• Employees aged 65 or over who still work.
• Anyone who bought a new car with a loan after 2024.