Definition
Exempt from withholding is a special status where your employer withholds zero federal income tax from your paycheck. You can only claim it if two conditions are met: (1) you had no federal income tax liability last year — meaning you got a full refund of any taxes withheld, and (2) you reasonably expect no liability this year.
To claim exempt, you write 'Exempt' in the space provided on Step 4c of your W-4 and leave Steps 2–4 blank. Exempt status is not about being exempt from FICA — you still pay Social Security and Medicare.
Exempt status expires February 15 each year. If you want to continue, you must submit a new W-4 by February 17. If you miss that deadline, your employer is required to revert your withholding to Single with no adjustments until you submit a new form.
How this affects your W-4
Exempt status is appropriate for students, dependents with part-time jobs, and very low earners who genuinely owe no federal income tax. It is not appropriate for most adults with full-time employment.
Claiming exempt incorrectly can result in a significant balance due plus underpayment penalties. If you're unsure whether you qualify, this calculator can help you project your liability.
See how exempt from withholding affects your withholding
Use the free W-4 calculator to calculate your exact withholding with your specific situation.
Open the W-4 Calculator →