IRS Form W-4S – IRS Forms, Instructions, Pubs 2026 – In today’s complex tax landscape, managing your federal income tax withholding is crucial to avoid surprises during tax season. If you’re receiving sick pay from a third-party payer, such as an insurance company, IRS Form W-4S plays a vital role in ensuring the right amount of tax is withheld. This form allows you to voluntarily request withholding from these payments, helping you stay compliant and potentially avoid underpayment penalties. In this comprehensive guide, we’ll break down everything you need to know about Form W-4S, including its purpose, how to fill it out, and key updates for 2026.
Whether you’re dealing with temporary disability benefits or other non-wage sick pay, understanding this form can save you time and money. Let’s dive in.
What Is IRS Form W-4S?
IRS Form W-4S, officially titled “Request for Federal Income Tax Withholding from Sick Pay,” is a specialized tax document designed for individuals receiving sick pay from third-party sources. Unlike regular wages, sick pay from entities like insurance companies isn’t automatically subject to withholding unless you request it. This form enables you to instruct the payer to deduct federal income tax from each payment, aligning your tax obligations throughout the year.
Sick pay typically refers to payments made under an employer’s plan when you’re temporarily absent due to illness or injury. However, if your employer pays these directly, withholding is mandatory and handled via Form W-4. Form W-4S is specifically for third-party payers, ensuring that taxable sick pay is reported correctly on your Form W-2 at year-end.
Key points about the form:
- Voluntary Nature: Filing Form W-4S is optional, but it’s recommended if you anticipate owing taxes on your sick pay to prevent underpayment penalties under IRC Section 6654.
- Legal Basis: Authorized under Internal Revenue Code sections 3402(o) and 6109, which govern withholding from non-wage payments.
- Minimum Withholding Rules: The amount withheld must be in whole dollars, at least $4 per day, $20 per week, or $88 per month, and cannot reduce your net payment below $10.
By using this form, you can “pay as you go,” reducing the risk of a large tax bill when filing your return.
Who Should Use Form W-4S?
Not everyone receiving sick pay needs Form W-4S. It’s targeted at specific scenarios:
- Recipients of Third-Party Sick Pay: If an insurance company or similar entity pays your sick benefits instead of your employer, this form is for you.
- Individuals Expecting Tax Liability: Use it if your sick pay is taxable and you want to withhold taxes to meet the IRS’s 90% payment rule for avoiding penalties.
- Joint Filers: Include combined income, deductions, and credits for you and your spouse if filing jointly.
Do not use Form W-4S if:
- Your employer directly pays the sick pay (use Form W-4 instead).
- You’re receiving state-paid medical leave (refer to Rev. Rul. 2025-4 for reporting guidelines).
Common users include employees on short-term disability through insurance policies, ensuring their tax withholding aligns with overall income.
When Should You Submit Form W-4S?
Timing is key for effective withholding:
- As Soon as Possible: Submit the form to your third-party payer when you start receiving sick pay or anticipate needing withholding.
- Annual Review: Reassess and submit a new form at the beginning of each year or if your financial situation changes (e.g., marriage, new dependents, or income shifts).
- Revocation or Changes: To stop or adjust withholding, submit a new Form W-4S with the updated amount or write “Revoked” in the amount field and sign it.
Failing to update could lead to over- or under-withholding, so use tools like the IRS Tax Withholding Estimator for guidance.
How to Fill Out IRS Form W-4S Step-by-Step?
Filling out Form W-4S is straightforward but requires accuracy. The form is divided into personal info, the withholding request, and a signature section. Here’s a step-by-step guide based on the 2026 version:
- Personal Information:
- Enter your full name (first, middle initial, last).
- Provide your Social Security Number (SSN).
- List your home address, including city, state, and ZIP code.
- Include any claim or identification number if applicable (e.g., from your insurance policy).
- Withholding Request:
- Check the box to indicate you want federal income tax withheld.
- Enter the whole dollar amount to withhold from each payment (use the worksheet below to calculate).
- Signature:
- Sign and date the form. Unsigned forms are invalid.
Give the top portion to your payer and keep the bottom for your records. For proportional withholding on partial payments, the payer will apply the same percentage.
Using the Worksheet to Calculate Your Withholding Amount
The form includes a worksheet to estimate the ideal withholding amount. Use your prior year’s tax return as a base and adjust for 2026 projections. Here’s how:
- Line 1: Estimated adjusted gross income for 2026 (include all income sources).
- Line 2: Deductions – Choose itemized or standard (2026 standard deductions: $32,200 for married filing jointly; $16,100 for single filers; see full list below).
- Line 3: Taxable income (Line 1 minus Line 2).
- Line 4: Tax amount using 2026 Tax Rate Tables (provided in the form; varies by filing status).
- Line 5: Tax credits (e.g., child tax credit, earned income credit).
- Line 6: Tax after credits (Line 4 minus Line 5).
- Line 7: Other withholdings or estimated payments.
- Line 8: Remaining tax due (Line 6 minus Line 7).
- Line 9: Number of expected sick pay payments in 2026.
- Line 10: Withholding per payment (Line 8 divided by Line 9, rounded to nearest dollar).
2026 Standard Deductions:
- Married filing jointly or qualifying surviving spouse: $32,200
- Head of household: $24,150
- Single or married filing separately: $16,100
- Additional for aged/blind: $1,650 ($2,050 if single and not surviving spouse)
For tax rates, refer to the detailed tables in the form, which range from 10% to 37% based on income brackets and filing status.
Pro Tip: Consult IRS Publication 505 for advanced withholding strategies.
Key Updates for Form W-4S in 2026
The 2026 Form W-4S incorporates adjustments from recent legislation:
- Inflation Adjustments: Standard deductions and tax brackets updated per Rev. Proc. 2025-32.
- New Provisions: Check for impacts from the One Big Beautiful Bill Act (P.L. 119-21), which may affect withholding calculations.
- No Major Structural Changes: The form remains similar to prior years, but always use the current version to avoid errors.
Stay informed via IRS.gov for any mid-year updates.
Common Mistakes to Avoid When Using Form W-4S
- Underestimating Tax: Failing to account for all income sources can lead to penalties.
- Incorrect Amounts: Ensure the withholding meets minimums and is in whole dollars.
- Not Updating: Life changes like divorce or new jobs require a new form.
- Confusing with Other Forms: Don’t mix up with Form W-4 (for wages) or W-4V (voluntary withholding from other payments).
Where to Download IRS Form W-4S?
Download the latest 2026 Form W-4S directly from the IRS website at https://www.irs.gov/pub/irs-pdf/fw4s.pdf. It’s free and includes all instructions.
Frequently Asked Questions About IRS Form W-4S
1. Is Form W-4S Mandatory?
No, it’s voluntary, but recommended to manage tax liabilities.
2. What If I Receive Sick Pay from Multiple Payers?
Submit a separate Form W-4S to each payer.
3. Can I Revoke My Withholding Request?
Yes, by submitting a new form marked “Revoked.”
4. How Does This Affect My Tax Return?
Withheld amounts are credited on your Form 1040, and you’ll receive a W-2 from the payer.
For more details, visit IRS.gov or consult a tax professional. By properly using Form W-4S, you can ensure smooth tax handling for your sick pay in 2026.