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 →