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The IRS W-4P form plays a crucial role in financial planning for individuals who receive pension or annuity payments. This form allows taxpayers to communicate their withholding preferences to payers of these benefits, ensuring that the correct amount of federal income tax is withheld from their payments. It is essential for individuals to understand how to fill out this form accurately, as errors can result in unexpected tax liabilities or penalties. Through the W-4P, taxpayers can specify the number of allowances they claim, request additional withholding, or even choose not to have any federal income tax withheld at all. This flexibility is important for managing one’s tax burden effectively and planning for the future. Knowing when and how to update the W-4P can lead to more accurate withholding and help prevent surprises come tax season.

IRS W-4P Example

Form W-4P

(Rev. December 2020)

Department of the Treasury

Internal Revenue Service

Withholding Certificate for Pension or Annuity Payments

OMB No. 1545-0074

2021

Future developments. For the latest information about any future developments related to Form W‐4P, such as legislation enacted after it was published, go to www.irs.gov/FormW4P.

Purpose of form. Form W‐4P is for U.S. citizens, resident aliens, or their estates who are recipients of pensions, annuities (including commercial annuities), and certain other deferred compensation. Use Form W‐4P to tell payers the correct amount of federal income tax to withhold from your payment(s). You may also use Form W‐4P to choose (a) not to have any federal income tax withheld from the payment (except for eligible rollover distributions or for payments to U.S. citizens to be delivered outside the United States or its possessions), or (b) to have an additional amount of tax withheld.

Your options depend on whether the payment is periodic, nonperiodic, or an eligible rollover distribution, as explained on pages 2 and 3. Your previously filed Form W‐4P will remain in effect if you don’t file a Form W‐4P for 2021.

General Instructions

Section references are to the Internal Revenue Code.

Follow these instructions to determine the number of withholding allowances you should claim for pension or annuity payment withholding for 2021 and any additional amount of tax to have withheld. Complete the worksheet(s) using the taxable amount of the payments.

If you don’t want any federal income tax withheld (see Purpose of form, earlier), you can skip the worksheets and go directly to the Form W‐4P below.

Sign this form. Form W‐4P is not valid unless you sign it.

You can also use the estimator at www.irs.gov/W4App to determine your tax withholding more accurately. Consider using this estimator if you have a more complicated tax situation, such as if you have more than one pension or annuity, a working spouse, or a large amount of income outside of your pensions. After your Form W‐4P takes effect, you can also use this estimator to see how the amount of tax you’re having withheld compares to your projected total tax for 2021. If you use the estimator, you don’t need to complete any of the worksheets for Form W‐4P.

Note that if you have too little tax withheld, you will generally owe tax when you file your tax return and may owe a penalty

unless you make timely payments of estimated tax. If too much tax is withheld, you will generally be due a refund when you file your tax return.

Filers with multiple pensions or more than one income. If you have more than one source of income subject to withholding (such as more than one pension or a pension and a job, or you’re married filing jointly and your spouse is working), read all of the instructions, including the instructions for the Multiple Pensions/More‐Than‐One‐Income Worksheet, before beginning.

Other income. If you have a large amount of income from other sources not subject to withholding (such as interest, dividends, or capital gains), consider making estimated tax payments using Form 1040‐ES, Estimated Tax for Individuals. Otherwise, you might owe additional tax. See Pub. 505, Tax Withholding and Estimated Tax, for more information. Get Form 1040‐ES and Pub. 505 at www.irs.gov/FormsPubs. Or, you can use the Deductions, Adjustments, and Additional Income Worksheet on page 5 or the estimator at www.irs.gov/W4App to make sure you have enough tax withheld from your payments. If you have income from wages, see Pub. 505 or use the estimator at www.irs.gov/W4App to find out if you should adjust your withholding on Form W‐4 or Form W‐4P.

Note: Social security and railroad retirement payments may be includible in income. See Form W‐4V, Voluntary Withholding Request, for information on voluntary withholding from these payments.

Withholding From Pensions and Annuities

Generally, federal income tax withholding applies to the taxable part of payments made from pension, profit-sharing, stock bonus, annuity, and certain deferred compensation plans; from individual retirement arrangements (IRAs); and from commercial annuities. The method and rate of withholding depend on (a) the kind of payment you receive; (b) whether the payments are to be delivered outside the United States or its possessions; and (c) whether the recipient is a nonresident alien individual, a nonresident alien beneficiary, or a foreign estate. Qualified distributions from a designated Roth account or Roth IRA are nontaxable and, therefore, not subject to withholding. See page 3 for special withholding rules that apply to payments to be delivered outside the United States and payments to foreign persons.

Separate here and give Form W-4P to the payer of your pension or annuity. Keep the worksheet(s) for your records.

Form W-4P

Department of the Treasury Internal Revenue Service

Withholding Certificate for

Pension or Annuity Payments

For Privacy Act and Paperwork Reduction Act Notice, see page 6.

OMB No. 1545-0074

2021

Your first name and middle initial

Last name

Your social security number

 

 

 

Home address (number and street or rural route)

 

Claim or identification number

 

 

(if any) of your pension or

 

 

annuity contract

City or town, state, and ZIP code

 

 

 

 

 

 

Complete the following applicable lines.

1Check here if you do not want any federal income tax withheld from your pension or annuity. (Don’t complete line 2 or 3.)

2Total number of allowances and marital status you’re claiming for withholding from each periodic pension or annuity payment. (You may also designate an additional dollar amount on line 3.) . . . . . . . . . . . . . .

Marital status:

Single

Married

Married, but withhold at higher Single rate.

3Additional amount, if any, you want withheld from each pension or annuity payment. (Note: For periodic payments,

you can’t enter an amount here without entering the number (including zero) of allowances on line 2.) . . . . $

(Enter number of allowances.)

Your signature

Date

Cat. No. 10225T

Form W-4P (2021)

Form W-4P (2021)

Page 2

Because your tax situation may change from year to year, you may want to refigure your withholding each year. You can change the amount to be withheld by using lines 2 and 3 of Form W-4P.

Choosing not to have income tax withheld. You (or in the event of death, your beneficiary or estate) can choose not to have federal income tax withheld from your payments by using line 1 of Form W-4P. For an estate, the election to have no income tax withheld may be made by the executor or personal representative of the decedent. Enter the estate’s employer identification number (EIN) in the area reserved for “Your social security number” on Form W-4P.

You may not make this choice for eligible rollover distributions. See Eligible rollover distribution—20% withholding below.

Caution: There are penalties for not paying enough federal income tax during the year, either through withholding or estimated tax payments. New retirees, especially, should see Pub. 505. It explains your estimated tax requirements and describes penalties in detail. You may be able to avoid quarterly estimated tax payments by having enough tax withheld from your pension or annuity using Form W-4P.

Periodic payments. Withholding from periodic payments of a pension or annuity is figured using certain withholding tables that are also used to figure withholding from wages. Periodic payments are made in installments at regular intervals over a period of more than 1 year. They may be paid annually, quarterly, monthly, etc.

If you want federal income tax to be withheld, you must designate the number of withholding allowances on line 2 of Form W-4P and indicate your marital status by checking the appropriate box. You can’t designate a specific dollar amount to be withheld. However, you can designate an additional amount to be withheld on line 3.

If you don’t want any federal income tax withheld from your periodic payments, check the box on line 1 of Form W-4P and submit the form to your payer. However, see Payments to Foreign Persons and Payments To Be Delivered Outside the United States on page 3.

Caution: If you don’t submit Form W-4P to your payer, the payer must withhold from periodic payments as if you’re married claiming three withholding allowances. Generally, this means that tax will be withheld if the taxable amount of your pension or annuity is at least $2,100 a month.

If you submit a Form W-4P that doesn’t contain your correct social security number (SSN), the payer must withhold as if

you’re single claiming zero withholding allowances even if you checked the box on line 1 to have no federal income tax withheld.

There are some kinds of periodic payments for which you can’t use Form W-4P because they’re already defined as wages subject to federal income tax withholding. These payments include retirement pay for service in the U.S. Armed Forces and payments from certain nonqualified deferred compensation plans and tax-exempt organizations’ deferred compensation plans described in section 457. Your payer should be able to tell you whether Form W-4P applies.

For periodic payments, your Form W-4P stays in effect until you change or revoke it. Your payer must notify you each year of your right to choose not to have federal income tax withheld (if permitted) or to change your choice.

Nonperiodic payments—10% withholding. Your payer must withhold at a flat 10% rate from the taxable amount of nonperiodic payments (but see Eligible rollover distribution— 20% withholding below) unless you choose not to have federal income tax withheld. Distributions from an IRA that are payable on demand are treated as nonperiodic payments. You can choose not to have federal income tax withheld from a nonperiodic payment (if permitted) by submitting Form W-4P (containing your correct SSN) to your payer and checking the box on line 1. However, see Payments to Foreign Persons and Payments To Be Delivered Outside the United States on page 3. Generally, your choice not to have federal income tax withheld will apply to any later payment from the same plan. You can’t use line 2 for nonperiodic payments. But you may use line 3 to specify an additional amount that you want withheld.

Caution: If you submit a Form W-4P that doesn’t contain your correct SSN, the payer can’t honor your request not to have income tax withheld and must withhold 10% of the payment for federal income tax.

Eligible rollover distribution—20% withholding. Distributions you receive from qualified pension or annuity plans (for example, 401(k) plans and section 457(b) plans maintained by a governmental employer) or tax-sheltered annuities that are eligible to be rolled over to an IRA or qualified plan are subject to a flat 20% federal withholding rate on the taxable amount of the distribution. The 20% withholding rate is required, and you can’t choose not to have income tax withheld from eligible rollover distributions. Don’t give Form W-4P to your payer unless you want an additional amount withheld. In that case, complete line 3 of Form W-4P and submit the form to your payer.

Form W-4P (2021)

Page 3

Note: The payer won’t withhold federal income tax if the entire distribution is transferred by the plan administrator in a direct rollover to a traditional IRA or another eligible retirement plan (if allowed by the plan), such as a 401(k) plan, qualified pension plan, governmental section 457(b) plan, section 403(b) contract, or tax-sheltered annuity.

Distributions that are (a) required by federal law, (b) one of a specified series of equal payments, or (c) qualifying “hardship” distributions are not “eligible rollover distributions” and aren’t subject to the mandatory 20% federal income tax withholding.

See Pub. 505 for details. See also Nonperiodic payments—10% withholding on page 2.

Tax relief for victims of terrorist attacks. For tax years ending after September 10, 2001, disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies), whether outside or within the United States, aren’t included in income. You may check the box on line 1 of Form W-4P and submit the form to your payer to have no federal income tax withheld from these disability payments. However, you must include in your income any amounts that you received or would’ve received in retirement had you not become disabled as a result of a terrorist attack. See Pub. 3920, Tax Relief for Victims of Terrorist Attacks, for more details.

Changing Your “No Withholding” Choice

Periodic payments. If you previously chose not to have federal income tax withheld and you now want withholding, complete another Form W-4P and submit it to your payer. If you want federal income tax withheld at the 2021 default rate (married with three allowances), write “Revoked” next to the checkbox on line 1 of the form. If you want tax withheld at a different rate, complete line 2 on the form.

Nonperiodic payments. If you previously chose not to have federal income tax withheld and you now want withholding, write “Revoked” next to the checkbox on line 1 and submit the Form W-4P to your payer.

Payments to Foreign Persons and Payments To Be Delivered Outside the United States

Unless you’re a nonresident alien, withholding (in the manner described above) is required on any periodic or nonperiodic payments that are to be delivered to you outside the United States or its possessions. Don’t check the box on line 1 of Form W-4P. See Pub. 505 for details.

In the absence of a tax treaty exemption, nonresident aliens, nonresident alien beneficiaries, and foreign estates are generally subject to a 30% federal withholding tax under section 1441 on the taxable portion of a periodic or nonperiodic pension or annuity payment that is from U.S. sources. However, most tax treaties provide that private pensions and annuities are exempt from withholding and tax. Also, payments from certain pension plans are exempt from withholding even if no tax treaty applies. See Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, and Pub. 519, U.S. Tax Guide for Aliens, for details. A foreign person should submit Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), to the payer before receiving any payments. The Form W-8BEN must contain the foreign person’s taxpayer identification number (TIN).

Statement of Federal Income Tax Withheld From Your Pension or Annuity

By January 31 of next year, your payer will furnish a statement to you on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., showing the total amount of your pension or annuity payments and the total federal income tax withheld during the year. If you’re a foreign person who has provided your payer with Form W-8BEN, your payer will instead furnish a statement to you on Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, by March 15 of next year.

Specific Instructions

Personal Allowances Worksheet

Complete this worksheet on page 4 first to determine the number of withholding allowances to claim.

Line C. Head of household please note: Generally, you can claim head of household filing status on your tax return only if you’re unmarried and pay more than 50% of the costs of keeping up a home for yourself and a qualifying individual. See Pub. 501 for more information about filing status.

Line D. Child tax credit. When you file your tax return, you may be eligible to claim a child tax credit for each of your eligible children. To qualify, the child must be under age 17 as of December 31, must be your dependent who generally lives with you for more than half the year, and must have the required SSN. To learn more about this credit, see Pub. 972, Child Tax Credit and Credit for Other Dependents. To reduce the tax withheld from your payments by taking this credit into account, follow the instructions on line D of the worksheet. On the worksheet, you will be asked about your total income. For this purpose, total income includes all of your pensions, wages, and other income, including income earned by a spouse if you’re filing a joint return.

Line E. Credit for other dependents. When you file your tax return, you may be eligible to claim a credit for other dependents for whom a child tax credit can’t be claimed, such as a qualifying child who does not meet the age or SSN requirement for the child tax credit, or a qualifying relative. To learn more about this credit, see Pub. 972. To reduce the tax withheld from your payments by taking this credit into account, follow the instructions on line E of the worksheet. On the worksheet, you will be asked about your total income. For this purpose, total income includes all of your pensions, wages, and other income, including income earned by a spouse if you’re filing a joint return.

Line F. Other credits. You may be able to reduce the tax withheld from your payments if you expect to claim other tax credits, such as tax credits for education (discussed in Pub.

970). If you do so, your payments will be larger, but the amount of any refund that you receive when you file your tax return will be smaller. Follow the instructions for the worksheet for converting credits to allowances in Pub. 505 if you want to reduce your withholding by taking these credits into account. If you figure all your credits using that worksheet in Pub. 505, enter “-0-” on lines D and E.

Deductions, Adjustments, and Additional Income Worksheet

Complete this worksheet to determine if you’re able to reduce the tax withheld from your pension or annuity payments to account for your itemized deductions and other adjustments to income, such as deductible IRA contributions. If you do so, your refund at the end of the year will be smaller, but your payments will be larger. You’re not required to complete this worksheet or reduce your withholding if you don’t wish to do so.

You can also use this worksheet to figure out how much to increase the tax withheld from your payments if you have a large amount of other income not subject to withholding, such as interest, dividends, or capital gains.

Another option is to take these items into account and make your withholding more accurate by using the estimator at www.irs.gov/W4App. If you use the estimator, you don’t need to complete any of the worksheets for Form W‐4P.

Multiple Pensions/More‐Than‐One‐Income Worksheet

Complete this worksheet if you receive more than one pension, if you have a pension and a job, or if you’re married filing jointly and have a working spouse or a spouse who receives a pension. If you don’t complete this worksheet, you might have too little tax withheld. If so, you will generally owe tax when you file your tax return and may be subject to a penalty.

• If neither of the above situations applies, stop here and enter the number from line G on line 2 of Form W-4P above.

Form W-4P (2021)

Page 4

Use the Multiple Pensions/More-Than-One-Income Worksheet from only one Form W-4P to figure the number of allowances you’re entitled to claim and any additional amount of tax to withhold from all pensions. If you (and/or your spouse if filing jointly) have two or more pensions, withholding will generally be more accurate if only the Form W-4P for the highest paying pension (a) claims any allowances after lines A through B in the Personal Allowances Worksheet or any allowances in the Deductions, Adjustments, and Additional Income Worksheet; and (b) uses the Multiple Pensions/More- Than-One-Income Worksheet. If you (and/or your spouse if filing jointly) have a pension and a job, withholding will generally be more accurate if the Form W-4P for the pension doesn’t claim

any allowances after lines A through B in the Personal Allowances Worksheet or any allowances in the Deductions, Adjustments, and Additional Income Worksheet. However, you may need to use the Multiple Pensions/More-Than-One-Income Worksheet. If you (and/or your spouse if filing jointly) have more than one pension (or a pension and a job) and you need to complete a new Form W-4P or Form W-4 for a pension or a job, you (and/or your spouse) will generally get more accurate withholding by completing new Form(s) W-4P or Form(s) W-4 for all other pensions and jobs. See Pub. 505 for details.

Another option is to use the estimator at www.irs.gov/W4App to figure your withholding more precisely.

Personal Allowances Worksheet (Keep for your records.)

A

Enter “2” for yourself

A

B

Enter “1” if you will file as married filing jointly

B

C

Enter “1” if you will file as head of household

C

DChild tax credit. See Pub. 972 for more information.

If your total income will be less than $72,351 ($105,051 if married filing jointly), enter “4” for each eligible child.

If your total income will be from $72,351 to $181,950 ($105,051 to $351,400 if married filing jointly), enter “2” for each eligible child.

If your total income will be from $181,951 to $200,000 ($351,401 to $400,000 if married filing jointly), enter “1” for each eligible child.

• If your total income will be higher than $200,000 ($400,000 if married filing jointly), enter “-0-” . . . . . . . D

ECredit for other dependents. See Pub. 972 for more information.

If your total income will be less than $72,351 ($105,051 if married filing jointly), enter “1” for each eligible dependent.

If your total income will be from $72,351 to $181,950 ($105,051 to $351,400 if married filing jointly), enter “1” for every two dependents (for example, “-0-” for one dependent, “1” if you have two or three dependents, and “2” if you have four dependents).

• If your total income will be higher than $181,950 ($351,400 if married filing jointly), enter “-0-” . . . . . . . E

FOther credits. If you have other credits, see the worksheet for converting credits to allowances in Pub. 505 and enter the amount from that worksheet here. If you figure all your credits using that worksheet in Pub. 505, enter

“-0-” on lines D and E

F

G Add lines A through F and enter the total here . . . . . . . . . . . . . . . . . . . . . .

G

 

{

• If you plan to itemize or claim adjustments to income and want to reduce your withholding, or

 

 

 

 

 

 

if you have a large amount of other income not subject to withholding and want to increase your

 

 

 

withholding, see the Deductions, Adjustments, and Additional Income Worksheet on page 5.

 

For accuracy,

 

• If you have more than one source of income subject to withholding or are married filing

 

complete all

 

jointly and you and your spouse both have income subject to withholding and your

 

worksheets

 

combined income from all sources exceeds $13,000 ($25,000 if married filing jointly), see the

 

that apply.

 

Multiple Pensions/More-Than-One-Income Worksheet on page 5 to avoid having too little

 

tax withheld, or use the estimator for more accuracy.

$12,550 if you’re single or married filing separately

Form W-4P (2021)

Page 5

Deductions, Adjustments, and Additional Income Worksheet

Note: Use this worksheet only if you plan to itemize deductions, claim certain adjustments to income, or have a large amount of other income not subject to withholding.

1

2

Enter an estimate of your 2021 itemized deductions. These include qualifying home mortgage interest,

 

 

charitable contributions, state and local taxes (up to $10,000), and medical expenses in excess of 7.5%

 

 

of your income. See Pub. 505 for details

1

$

$25,100 if you’re married filing jointly or qualifying widow(er)

 

 

 

Enter: { $18,800 if you’re head of household

}

2

$

 

 

3 Subtract line 2 from line 1. If zero or less, enter “-0-”

3

$

4Enter an estimate of your 2021 adjustments to income, qualified business income deduction, and any

additional standard deduction for age or blindness. See Pub. 505 for information about these items .

4

$

5 Add lines 3 and 4 and enter the total

5

$

6Enter an estimate of your 2021 other income not subject to withholding (such as dividends, interest, or

capital gains)

6

$

7 Subtract line 6 from line 5. If zero, enter “-0-”. If less than zero, enter the amount in parentheses . .

7

$

8Divide the amount on line 7 by $4,300 and enter the result here. If a negative amount, enter in

parentheses. Drop any fraction

8

9 Enter the number from the Personal Allowances Worksheet, line G, on page 4

9

10Add lines 8 and 9 and enter the total here. If zero or less, enter “-0-”. If you plan to use the Multiple

Pensions/More-Than-One-Income Worksheet, also enter this total on line 1 below. Otherwise, stop

 

here and enter this total on Form W-4P, line 2, on page 1

10

Multiple Pensions/More-Than-One-Income Worksheet

Note: Use this worksheet only if the instructions under line G from the Personal Allowances Worksheet direct you here. This applies if you (and your spouse if married filing jointly) have more than one source of income subject to withholding (such as more than one pension, or a pension and a job, or you have a pension and your spouse works).

1Enter the number from the Personal Allowances Worksheet, line G, on page 4 (or from line 10 above if

you used the Deductions, Adjustments, and Additional Income Worksheet)

1

2Find the number in Table 1 on page 6 that applies to the LOWEST paying pension or job and enter it here. However, if you’re married filing jointly and the amount from the highest paying pension or job is $75,000 or less and the combined amounts for you and your spouse are $107,000 or less, do not enter

more than “7”

2

3If line 1 is more than or equal to line 2, subtract line 2 from line 1. Enter the result here (if zero, enter

“-0-”) and on Form W-4P, line 2, on page 1. Do not use the rest of this worksheet

3

Note: If line 1 is less than line 2, enter “-0-” on Form W-4P, line 2, on page 1. Complete lines 4 through 9 below to figure the additional withholding amount necessary to avoid a year-end tax bill.

4

Enter the number from line 2 of this worksheet

4

 

 

 

5

Enter the number from line 1 of this worksheet

5

 

 

 

6

Subtract line 5 from line 4

6

 

7

Find the amount in Table 2 on page 6 that applies to the HIGHEST paying pension or job and enter it here

7

$

8

Multiply line 7 by line 6 and enter the result here. This is the additional annual withholding needed . .

8

$

9Divide line 8 by the number of payments remaining in 2021. For example, divide by 8 if you’re paid

every month and you complete this form in April 2021. Enter the result here and on Form W-4P, line 3,

 

 

on page 1. This is the additional amount to be withheld from each payment

9

$

Form W-4P (2021)

 

 

 

 

 

 

 

 

 

Page 6

 

 

 

 

 

Table 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Married Filing Jointly

 

 

 

 

All Others

 

 

 

 

 

 

 

 

If wages from LOWEST paying

Enter on line 2 above

 

If wages from LOWEST paying

 

Enter on line 2 above

job or pension are—

 

job or pension are—

 

$0

-

$799

 

0

 

$0

-

$799

 

0

800

-

5,100

 

1

 

800

-

5,100

 

1

5,101

-

9,400

 

2

 

5,101

-

9,400

 

2

9,401

-

13,700

 

3

 

9,401

-

13,700

 

3

13,701

-

18,000

 

4

 

13,701

-

22,000

 

4

18,001

-

22,300

 

5

 

22,001

-

27,500

 

5

22,301

-

26,600

 

6

 

27,501

-

32,000

 

6

26,601

-

35,000

 

7

 

32,001

-

40,000

 

7

35,001

-

40,000

 

8

 

40,001

-

60,000

 

8

40,001

-

46,000

 

9

 

60,001

-

75,000

 

9

46,001

-

55,000

 

10

 

75,001

-

85,000

 

10

55,001

-

60,000

 

11

 

85,001

-

95,000

 

11

60,001

-

70,000

 

12

 

95,001

- 100,000

 

12

70,001

-

75,000

 

13

 

100,001

- 110,000

 

13

75,001

-

85,000

 

14

 

110,001

- 115,000

 

14

85,001

-

95,000

 

15

 

115,001

- 125,000

 

15

95,001

- 125,000

 

16

 

125,001

- 135,000

 

16

125,001

- 155,000

 

17

 

135,001

- 145,000

 

17

155,001

- 165,000

 

18

 

145,001

- 160,000

 

18

165,001

- 175,000

 

19

 

160,001

- 180,000

 

19

175,001

- 180,000

 

20

 

180,001 and over

 

20

180,001

- 195,000

 

21

 

 

 

 

 

 

195,001

- 205,000

 

22

 

 

 

 

 

 

205,001 and over

 

23

 

 

 

 

 

 

 

 

 

 

 

Table 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Married Filing Jointly

 

 

 

 

All Others

 

 

 

 

 

 

 

If wages from HIGHEST paying

Enter on line 7 above

 

If wages from HIGHEST paying

 

Enter on line 7 above

job or pension are—

 

job or pension are—

 

$0

- $25,350

 

$430

 

$0

-

$7,375

 

$430

25,351

-

85,850

 

520

 

7,376

-

37,625

 

520

85,851

- 176,650

 

950

 

37,626

-

83,025

 

950

176,651

-

332,200

 

1,030

 

83,026

-

160,800

 

1,030

332,201

- 420,300

 

1,380

 

160,801

- 204,850

 

1,380

420,301

- 627,650

 

1,510

 

204,851

- 515,900

 

1,510

627,651 and over

 

1,590

 

515,901 and over

 

1,590

Privacy Act and Paperwork Reduction Act Notice

We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to provide this information only if you want to (a) request federal income tax withholding from periodic pension or annuity payments based on your withholding allowances and marital status;

(b)request additional federal income tax withholding from your pension or annuity; (c) choose not to have federal income tax withheld, when permitted; or (d) change or revoke a previous Form W-4P. To do any of the aforementioned, you are required by sections 3405(e) and 6109 and their regulations to provide the information requested on this form. Failure to provide this information may result in inaccurate withholding on your payment(s). Providing false or fraudulent information may subject you to penalties.

Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation, and to cities, states, the District of Columbia, and U.S. commonwealths

and possessions for use in administering their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism.

You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103.

The average time and expenses required to complete and file this form will vary depending on individual circumstances. For estimated averages, see the instructions for your income tax return.

If you have suggestions for making this form simpler, we would be happy to hear from you. See the instructions for your income tax return.

File Breakdown

Fact Name Description
Purpose The IRS W-4P form is used to designate how much federal income tax should be withheld from pensions and annuities.
Eligibility Retirees and individuals receiving pension or annuity income can fill out this form.
State Requirements While the W-4P is federal, some states may require their own version for tax withholding purposes, governed by state tax laws.
Submission Frequency Form W-4P should be submitted whenever there is a change in tax situation or at least annually to ensure accurate withholding.
Additional Considerations Completing the form accurately helps avoid underpayment, potentially leading to penalties at tax time.

Guide to Using IRS W-4P

Once you have your IRS W-4P form in front of you, it's important to fill it out accurately. This ensures that the correct amount of federal income tax is withheld from your retirement payments. Follow these steps carefully to complete the form.

  1. Begin by entering your personal information in the top section. Include your name, address, Social Security number, and filing status.
  2. Proceed to the section for specifying the amount of withholding. You can choose to have a flat amount withheld or use a percentage of each payment.
  3. If applicable, fill in any additional withholding amounts that you desire. This can help prevent underpayment penalties later.
  4. Consider your situation. Indicate any other adjustments, like tax credits or other income sources, that might affect your withholding needs.
  5. Sign and date the form at the bottom. This step is crucial as it certifies the accuracy of the information provided.
  6. Submit the completed form to your payer—whether that’s your employer, pension plan administrator, or other withholding agent. Keep a copy for your records.

After submitting the W-4P, monitor your tax withholding. Adjustments may be necessary if your financial situation changes throughout the year, such as a new job or changes in income. Revisiting the form periodically can help ensure that your tax withholdings are on track.

Get Answers on IRS W-4P

What is the IRS W-4P form?

The IRS W-4P form is a tax form that helps individuals provide information to payers of pensions or annuities regarding how much federal income tax should be withheld from their payments. If you receive any type of periodic payment, such as retirement distributions, you may be asked to fill out a W-4P to ensure the correct amount is withheld. Completing the form accurately helps you avoid owing unexpected taxes during tax season.

Who needs to fill out a W-4P form?

Typically, you will need to fill out a W-4P form if you are receiving retirement income, pension payments, or annuity payments. This includes individuals who are retired and are drawing on their retirement accounts or receiving survivor benefits. Generally, anyone who wants or needs to have federal income tax withheld from their payments should complete this form to declare their withholding preferences.

How do I complete the W-4P form?

To complete the W-4P form, you will need to provide personal information such as your name, address, and Social Security number at the top of the form. You will also be required to specify your filing status and the number of allowances you claim. Additionally, if you want to withhold an extra amount, you can indicate that on the form. Finally, it is necessary to sign and date the form before submitting it to the payer.

Can I change my withholding preferences after submitting the W-4P?

Yes, individuals have the option to change their withholding preferences at any time. If your financial situation changes or if you find that your current withholding is not suitable, you can submit a new W-4P form to the payer. It is advisable to review your tax situation periodically to ensure that the amount being withheld aligns with your tax obligations.

What should I do if I have more questions about the W-4P form?

If you have more questions about completing the W-4P form or about your specific tax situation, you might consider consulting the IRS website, where detailed instructions and FAQs are available. Alternatively, speaking with a tax professional or financial advisor can provide clarity and ensure that you make informed decisions regarding your tax withholdings.

Common mistakes

Filling out the IRS W-4P form accurately is crucial for ensuring the right amount of federal income tax is withheld from your pension or annuity payments. One common mistake is underestimating the number of allowances or deductions. While it's tempting to claim as many allowances as possible to reduce withholding, this can backfire. If too little tax is withheld, you may find yourself with an unexpected tax bill when you file your return.

Another frequent error involves failing to update the form after major life changes. Events such as marriage, divorce, or the birth of a child can significantly alter your tax situation. Not adjusting your W-4P to reflect these changes may lead to inaccurate withholdings. It's essential to review and adjust your withholding whenever your circumstances change to avoid surprises at tax time.

Some individuals also neglect to consider other sources of income. If you have additional income outside of your pension or annuity, failing to account for this can lead to inadequate withholding on your W-4P. Remember, the withholdings on your pension payments may not cover your total tax liability if you have a significant amount earned from other sources.

Lastly, many people overlook the importance of estimating their expected annual income accurately. Underestimating your income can lead to insufficient withholding, similar to underestimating allowances. Take time to project your yearly income honestly. If you anticipate a higher tax bracket, you might want to consider adjusting your withholding accordingly. A thoughtful approach will help you avoid common pitfalls and lead to a smoother tax-filing process.

Documents used along the form

The IRS W-4P form is an important document for individuals who receive retirement payments and need to determine their federal income tax withholding. It helps ensure that the correct amount of tax is withheld from these payments. However, several other forms and documents may also be necessary depending on an individual's financial situation. Below is a list of common forms used in conjunction with the W-4P.

  • IRS Form W-4: This form is used by employees to indicate their tax withholding preferences for regular wages. While the W-4P is specific to pension and annuity payments, the W-4 applies to all other types of employment income.
  • IRS Form 1040: The standard individual income tax return form for reporting an individual’s annual income and calculating taxes owed. After filling out a W-4P, you'll need to consider how the payments impact your overall tax situation, which is done on the 1040 form.
  • IRS Form 1099-R: This form reports distributions from pensions, annuities, retirement plans, and other similar financial products. It provides essential information on the amount received, which influences your reporting on the 1040.
  • IRS Form 8379: Known as the "Injured Spouse Allocation," this form can be filed if one spouse's tax refund is intercepted to pay the other spouse's debts. If you file jointly and one spouse has debts, it's useful to protect the refund that might be attributed to the injured spouse's income.
  • State Tax Withholding Forms: Most states require a separate form for tax withholding similar to the W-4P for federal taxes. These forms ensure state taxes are withheld appropriately from retirement payments or other income.

It’s essential to review and possibly update these forms regularly as your financial situation changes. Keeping all relevant documents in order contributes to effective tax planning and compliance, ultimately helping you manage your financial future more effectively.

Similar forms

The IRS W-4P form is used for withholding taxes on periodic pension or annuity payments. Similar forms serve various purposes related to tax withholding and reporting. Here are seven documents that share similarities with the W-4P form:

  • W-4 Form: This form is used by employees to determine the amount of federal income tax withheld from their wages. Like the W-4P, it allows individuals to specify additional withholding preferences.
  • W-4S Form: The W-4S form allows individuals to request voluntary withholding on certain government payments, like Social Security benefits. Both forms enable recipients to manage their tax liabilities through withholding.
  • W-9 Form: The W-9 form is used to provide taxpayer identification information to companies that pay you. This document collects necessary information for income reporting, similar to how the W-4P informs pension payers about withholding preferences.
  • W-2 Form: While the W-2 is used to report annual wages and taxes withheld, the W-4P affects the withholding amounts during the year. Both forms relate to income reporting and tax obligations but at different stages.
  • 1099-R Form: The 1099-R reports distributions from pensions, annuities, and retirement plans. Similar to the W-4P, it deals with tax consequences of retirement income transactions.
  • 1040 Form: This is the individual income tax return form. It ultimately reflects the withholding decisions made on W-4P and other forms, as it reports final tax liabilities based on all income sources.
  • Form 8888: This form is used to allocate your refund to multiple accounts. While it differs in purpose, both the 8888 and W-4P influence how beneficiaries receive funds and the management of their taxes.

Dos and Don'ts

When filling out the IRS W-4P form, it's important to ensure accuracy to avoid issues with tax withholding. Here’s a list of dos and don’ts to help guide you through the process.

  • Do read the instructions carefully. Understanding the purpose of the form will help you fill it out correctly.
  • Do provide accurate personal information. Make sure your name, address, and Social Security number are correct.
  • Do consider your total income and tax situation. Assess whether you want to have more or less tax withheld based on your financial circumstances.
  • Do update your form whenever there is a major life change. Events like marriage, divorce, or retirement may impact your withholding needs.
  • Don’t leave any required fields blank. Omitting information can lead to delays or mistakes in processing your withholding.
  • Don’t estimate your deductions without careful consideration. This can result in under-withholding and may lead to a tax bill when you file your return.

By following these guidelines, you can help ensure your W-4P form is filled out properly, making tax season smoother for you.

Misconceptions

The IRS W-4P form is an essential document for recipients of pension or annuity payments, allowing them to specify withholding preferences. However, there are several misconceptions surrounding this form that can lead to confusion. Here are eight common misconceptions, explained for clarity:

  • It is only for retirees. Many believe the W-4P is exclusively for retirees. In reality, anyone receiving pension or annuity payments, regardless of age, may need to fill out this form.
  • Filling it out is optional. Some think they can ignore the W-4P. While it is not mandatory, failure to submit it may result in higher withholding rates by default.
  • State taxes are automatically withheld. A common belief is that the IRS form covers state tax withholding. While federal tax options are specified, state tax withholding may require a separate form.
  • You can only update it once a year. Many assume that they can only submit changes to their withholding once annually. However, updates can be made whenever personal circumstances change.
  • The form guarantees a refund. Some individuals think completing the W-4P ensures a tax refund at the end of the year. The form only impacts withholding amounts; actual refunds depend on total tax liabilities.
  • It is the same as the W-4 form for employees. Many confuse W-4P with the regular W-4 used by employees. They serve different purposes and apply to distinct income sources.
  • Once submitted, the form cannot be changed. There is a belief that submitting the W-4P is a permanent decision. In fact, recipients can modify their withholding preferences at any time.
  • It affects Social Security benefits. Some worry that completing the W-4P will influence their Social Security benefits. This form addresses tax withholding, not eligibility or benefit amounts for Social Security.

Understanding these misconceptions can help individuals make informed decisions regarding their tax withholding and avoid unexpected tax liabilities.

Key takeaways

  • The IRS W-4P form is used to request federal income tax withholding on pension or annuity payments. Proper completion ensures taxes are withheld correctly.

  • When filling out the form, it's essential to provide accurate personal information, including your name, address, and Social Security number to avoid any delays or errors.

  • Estimating your total income is critical. Consider all income sources to determine the right amount of tax withholding. This information will guide you in making appropriate adjustments.

  • You can designate a specific amount to be withheld in addition to the default percentage, giving you more control over your tax obligations throughout the year.

  • It’s important to review your W-4P form periodically, especially after major life changes like marriage, having children, or experiencing job changes, as these can affect your tax situation.

  • Submit the completed W-4P form to the payer of your pension or annuity payments, as they are responsible for withholding the correct amounts based on your instructions.

  • If you have questions or uncertainties about the withholding process, seeking guidance from a tax professional can provide valuable insights tailored to your situation.