Definition
Before 2020, the W-4 used a system of 'allowances' — each allowance you claimed reduced the amount of income subject to withholding by a fixed amount per year ($4,300 in 2019). Claiming 0 meant maximum withholding; claiming more reduced it. The more allowances you claimed, the less was withheld.
This system was eliminated with the 2020 W-4 redesign. The IRS replaced allowances with a more transparent system using dollar amounts: you directly enter dependent credits, deductions, and extra withholding rather than translating everything into abstract allowance units.
If your employer still has your pre-2020 W-4 on file, it remains valid and your employer is still required to honor it. But any new or updated W-4 must use the current format.
How this affects your W-4
The old 'how many allowances should I claim' question no longer applies. On the 2020+ W-4, you don't claim allowances at all.
If you're updating a W-4 for the first time in years, you'll notice the new form asks for dollar amounts instead of allowance counts — use this calculator to get the correct figures for each line.
See how allowances (old w-4 system) affects your withholding
Use the free W-4 calculator to calculate your exact withholding with your specific situation.
Open the W-4 Calculator →Read the guide
W-4 Allowances Explained: Claiming 0 vs 1 (and What Replaced Them)
Allowances left the W-4 in 2020. What claim 0 and claim 1 meant and how to get the same result on the current form.
How to Fill Out a W-4 Form in 2026: Complete Step-by-Step Guide
Complete walkthrough of all five W-4 steps for 2026 — from filing status to extra withholding, the new OBBBA deductions, common mistakes and when to update.
W-4 Step 3: Claim Dependents and the $2,200 Child Credit (2026)
Step 3 directly reduces your withholding for every qualifying child and dependent. Here's exactly what to enter.
Related terms
W-4 Form
The IRS form employees submit to their employer to control how much federal tax is withheld.
Withholding
Taxes your employer takes out of each paycheck and sends to the IRS and your state before you receive your pay.
Standard Deduction
A flat dollar amount that reduces your taxable income — most taxpayers take this instead of itemizing.