The federal income tax is a pay-as-you-go tax.
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Publication 505
Tax
Withholding
and Estimated
Tax
For use in
2026
Introduction
The federal income tax is a pay-as-you-go tax.
You must pay the tax as you earn or receive income during the year. There are two ways to
pay as you go.
• Withholding. If you are an employee, your
employer probably withholds income tax
from your pay. In addition, tax may be withheld from certain other income, such as
pensions, bonuses, commissions, and
gambling winnings. The amount withheld is
paid to the IRS in your name.
• Estimated tax. If you don’t pay your tax
through withholding or don’t pay enough
tax that way, you might have to pay estimated tax. People who are in business for
themselves will generally have to pay their
tax this way. You may have to pay estimated tax if you receive income such as dividends, interest, capital gains, rents, and
royalties. Estimated tax is used to pay not
only income tax but other taxes such as
self-employment tax and alternative minimum tax.
This publication explains both of these methods. It also explains how to take credit on your
return for the tax that was withheld and for your
estimated tax payments.
If you didn’t pay enough tax during the year,
either through withholding or by making estimated tax payments, you may have to pay a penalty. Generally, the IRS can figure this penalty
for you.
Nonresident aliens. Before completing
Form W-4, nonresident alien employees should
see Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens (Rev. January
2020), which provides nonresident aliens who
are not exempt from withholding instructions for
completing Form W-4, and the Instructions for
Form 8233, Exemption From Withholding on
Compensation for Independent (and Certain
Dependent) Personal Services of a Nonresident
Alien Individual. Also, see chapter 8 of Pub.
519.
Final regulations on income tax withholding. Final regulations on income tax withholding were published in the Federal Register
on October 6, 2020 (at 85 FR 63019). The regulations implement changes made by the Tax
Cuts and Jobs Act and reflect the redesigned
withholding certificate (Form W-4). See the regulations for detailed information on income tax
withholding.
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Mar 31, 2026
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You can send us comments through
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Publication 505 (2026) Catalog Number 15008E
Department of the Treasury Internal Revenue Service www.irs.gov
Getting answers to your tax questions.
If you have a tax question not answered by this
publication or the How To Get Tax Help section
at the end of this publication, go to the IRS Interactive Tax Assistant page at IRS.gov/
Help/ITA where you can find topics by using the
search feature or viewing the categories listed.
Getting tax forms, instructions, and publications. Go to IRS.gov/Forms to download
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Ordering tax forms, instructions, and
publications. Go to IRS.gov/OrderForms to order current forms, instructions, and publications; call 800-829-3676 to order prior-year
forms and instructions. The IRS will process
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as possible. Don’t resubmit requests you’ve already sent us. You can get forms and publications faster online.
What’s New for 2026
Use your 2025 tax return as a guide in figuring
your 2026 estimated tax, but be sure to
consider the following.
Standard deduction amount increased. For
2026, the standard deduction amount has been
increased for all filers, and the amounts are as
follows.
• Single or Married filing separately—$16,100.
• Married filing jointly or Qualifying surviving
spouse—$32,200.
• Head of household—$24,150.
Retirement savings contribution credit income limits increased. In order to claim this
credit for 2026, your MAGI must not be more
than $40,250 ($80,500 if Married filing jointly;
$60,375 if Head of household).
Adoption credit or exclusion. The maximum
adoption credit or exclusion for employer-provided adoption benefits has increased to
$17,670. In order to claim either the credit or exclusion, your MAGI must be less than $305,080.
For 2026, up to $5,120 of the adoption credit is
now refundable. The refundable portion is determined per child.
Changes to QBID. Recent legislation made
the qualified business income deduction (QBID)
permanent. In addition, beginning in 2026, if
you have a minimum of $1,000 in total qualified
business income from an active trade or business, you may be able to claim a minimum
QBID of $400. Also, the phase-in range for taxpayers who are married filing jointly will increase to $150,000 and to $75,000 for all other
filing statuses.
Casualty loss deduction made permanent
and expanded. The deduction for certain personal casualty losses has been made permanent. In addition, beginning in 2026, a personal
casualty loss deduction can also include losses
associated with a state-declared disaster. For
more information, see the Instructions for Form
4684 and Pub. 547.
Deduction for educator expenses. Beginning in 2026, if you are an eligible educator with
qualifying expenses, you may be able to claim a
deduction for those expenses on Form 1040,
Schedule 1, as well as an itemized deduction
2
on Schedule A (Form 1040). You will take the
deduction on Schedule 1 (Form 1040) and then
determine the amount of any itemized deduction you can take on Schedule A. The type of
expenses that qualify for each deduction is
slightly different.
Mortgage insurance premiums. Beginning in
2026, the election to deduct qualified mortgage
insurance premiums paid under a mortgage insurance contract issued after December 31,
2006, in connection with a home acquisition
debt that was secured by a first or second home
has been made permanent.
Limit on itemized deductions. For 2026, your
overall itemized deductions may be reduced. If
your taxable income is more than the following
amounts, your itemized deductions will be reduced by 5.4% of the lesser of (1) your total
itemized deductions or (2) the amount your taxable income is more than the following
amounts.
• $768,700 if Married filing jointly or Qualifying surviving spouse,
• $640,600 if Head of household or Single,
or
• $384,350 if Married filing separately.
The limitation will be applied after any other
applicable limitations on your itemized deductions and will not apply when figuring any QBID.
Moving expense deduction for members of
the intelligence community. Beginning in
2026, in addition to members of the Armed
Forces, members of the intelligence community
may be able to deduct their moving expenses
on Schedule 1 (Form 1040). For more information, see the instructions for Schedule 1 (Form
1040).
Limitation on deductible gambling losses.
Beginning in 2026, your gambling loss deduction on Schedule A (Form 1040) will be limited
to lesser of (1) 90% of your gambling losses or
(2) your gambling winnings.
Changes to the child and dependent care
credit. For 2026, recent legislation has enhanced the credit for qualifying child and dependent care expenses paid for the care of an
eligible child. The credit amount remains $3,000
($6,000 for two or more qualifying children) but
the maximum credit rate has increased from
35% to 50% of your qualifying expenses.
Charitable contribution deduction for
non-itemizers. Beginning in 2026, you can
claim a deduction for cash contributions made
to eligible tax-exempt organizations. You don’t
have to itemize to take the deduction. The maximum deduction is $1,000 ($2,000 for married
filing jointly) with certain other limitations.
Charitable contribution deduction floor for
itemized deductions. Beginning in 2026, if
you itemize, you can only deduct charitable
contributions that are more than 0.5% of your
adjusted gross income. Any amount that falls
under the 0.5% floor can’t be deducted in 2026.
This limitation is in addition to the overall limit on
itemized deductions.
Expiration of credits. The following credits
have expired and you can no longer claim them
on your return in 2026.
• Credit for energy efficient home improvements.
• Credit for residential clean energy systems.
The credit for alternative refueling property
expires in 2026 for property acquired and
placed in service after June 30, 2026.
SSN required for education credits. Beginning in 2026, a valid social security number issued before the due date of the return (including extensions) is required in order to be eligible
to claim the American Opportunity Credit and
Lifetime Learning Credit. If you are claiming the
American Opportunity Credit, you must include
the EIN of the institution to which you paid qualified tuition and related expenses on Form 8863.
Changes to the premium tax credit. Beginning in 2026, the following changes apply to the
premium tax credit.
• If your household income is more than
400% of the federal poverty line, you are
no longer eligible for the premium tax
credit.
• There is no longer a limit on the amount
you will have to pay back if you received
too much in advanced credit; this is true
even if your household income is less than
400% of the federal poverty line.
Changes to information returns for qualified tips. If you received qualified tips in 2026,
these tips should be reported to you as follows.
• Form W-2, box 12, code “TP.”
• Form 1099-MISC, box 13a.
• Form 1099-NEC, box 1b.
• Form 1099-K, box 1c.
The Treasury Tipped Occupation Code(s)
for the occupation in which you earned the
qualified tips should be reported to you as follows.
• Form W-2, box 14b.
• Form 1099-MISC, box 13b.
• Form 1099-NEC, box 1c.
• Form 1099-K, box 1d.
You can use this information when figuring
your 2026 deduction for qualified tips on Schedule 1-A (Form 1040). Also, see IRS.gov/
TippedOccupations.
Changes to information returns for qualified overtime. If you received qualified overtime in 2026, the amount should be reported to
you as follows.
• Form W-2, box 12, code “TT.”
• Form 1099-MISC, box 14.
• Form 1099-NEC, box 1d.
You can use this information when figuring
your 2026 deduction for qualified overtime on
Schedule 1-A (Form 1040).
Increase in threshold for backup withholding. Beginning in 2026, the amount of winnings
subject to backup withholding and information
reporting has increased. If you have winnings of
at least $2,000 from bingo or slot machines,
keno, and certain other gambling winnings, the
payer will withhold a flat 24%.
Reminders
Future developments. The IRS has created a
page on IRS.gov for information about Pub. 505
at IRS.gov/Pub505. Information about any future developments affecting Pub. 505 (such as
legislation enacted after we release it) will be
posted on that page.
Social security tax. Generally, each employer
for whom you work during the tax year must
Publication 505 (2026)
withhold social security tax up to the annual
limit. The annual limit is $184,500 in 2026.
Form 1040-SS filers. The Estimated Tax
Worksheet for filers of Form 1040-SS is included on the Form 1040-ES. See Form 1040-ES
and its instructions for more information.
Trump account and new Form 4547. Recent
legislation allows parents, guardians, and other
authorized individuals to elect to establish a
new type of individual retirement account,
called a Trump account, for the exclusive benefit
of certain children. If the child was born after
2024 and before 2029, is a U.S. citizen, and
meets certain other requirements, the authorized individual may also elect to receive a
$1,000 pilot program contribution to the child’s
Trump account. Both elections can be made on
Form 4547, which can be filed at the same time
as the authorized individual’s 2026 income tax
return. For more information on Trump accounts, and to learn how to make these elections, see Form 4547 and its instructions.
Expired individual taxpayer identification
number (ITIN) and renewal. If you have an
ITIN that you haven’t included on a tax return in
the last 3 consecutive years, it may be expired
and you may need to renew it. If your ITIN has
expired and you don’t have an SSN, you can
make estimated tax payments before you renew
your ITIN. To renew your ITIN, and for more information, see the Instructions for Form W-7.
Advance payments of the premium tax
credit. If you buy health insurance through the
Health Insurance Marketplace, you may be eligible to have advance payments of the premium
tax credit paid on your behalf to the insurance
company. Receiving too little or too much in advance will affect your refund or balance due.
Promptly report changes in your income or family size to your Marketplace. See Form 8962
and its instructions for more information.
No tax on tips. You may be eligible to take a
deduction for qualified tips paid to you in 2026.
You can’t deduct more than $25,000 of those
tips. Your deduction will be limited if your modified adjusted gross income is more than
$150,000 ($300,000 if married filing jointly). To
be eligible, you and/or your spouse who received the tips must have a valid SSN. If you are
married, you must file a joint return.
No tax on overtime. If you earned qualified
overtime, you may be eligible to deduct up to
$12,500 ($25,000 if married filing jointly) of your
qualified overtime compensation. Your deduction will be limited if your modified adjusted
gross income is more than $150,000 ($300,000
if married filing jointly). To be eligible, you and/or
your spouse who received the overtime must
have a valid SSN. If you are married, you must
file a joint return.
deduction will be limited if your modified adjusted gross income is more than $75,000
($150,000 if married filing jointly). To be eligible,
you and/or your spouse must have a valid SSN.
If you are married, you must file a joint return.
The maximum amount of the deduction is
$6,000 ($12,000 if both spouses are eligible).
State and local tax deduction increased.
The overall limit on the deduction for state and
local income, sales, and property taxes has increased. For 2026, the limit is $40,400 ($20,200
if married filing separately) and the overall limit
is reduced if your modified adjusted gross income is more than $505,000 ($252,500 if married filing separately) but will not be reduced below $10,000 ($5,000 if married filing
separately). For more information, see the Instructions for Schedule A (Form 1040).
Changes to the child tax credit and additional child tax credit. To be eligible to claim
the child tax credit (CTC) or additional child tax
credit (ACTC), you must have a valid SSN,
which means it must be valid for employment
and issued before the due date of your return
(including extensions). If you are filing a joint return, only one spouse is required to have a valid
SSN in order to be eligible for the CTC and
ACTC. The other spouse must have either an
SSN or ITIN, and it must have been issued on
or before the due date of the return (including
extensions).
Changes to the adoption credit. In addition
to a portion of the adoption credit being refundable, Indian tribal governments now have parity
with state governments in determinations of
special needs adoptions.
Election to pay tax on farmland sale or exchange in installments. If you sold or exchanged qualified farmland to a qualified
farmer, you can elect to pay the net income tax
liability on the sale or exchange in four equal installments. For more information, see Form
1062 and its instructions.
Relief from additions to tax for underpayments applicable to an election made under
section 1062. The IRS will waive the portion of
the estimated tax penalty attributable to a qualified sale or exchange of qualified farmland to
qualified farmers for which an election under
section 1062(a) is properly made. Taxpayers
that make an election under section 1062 to defer payment of tax may figure their required estimated tax payments using the guidance in Notice 2026-3. See Notice 2026-3, 2026-02 I.R.B.
IRS.gov/irb/
307,
available
at
2026-02_IRB#NOT-2026-3.
No tax on car loan interest. If you paid or accrued qualified passenger vehicle loan interest
in 2026 on a vehicle you purchased after 2024
for personal use, you may be eligible to deduct
up to $10,000 of that interest. Your deduction
will be limited if your modified adjusted gross income is more than $100,000 ($200,000 if married filing jointly).
Additional Medicare Tax. Generally, a 0.9%
Additional Medicare Tax applies to Medicare
wages, Railroad Retirement Tax Act compensation, and self-employment income over
$200,000 if you are filing as Single, Head of
household, or Qualifying surviving spouse; over
$250,000 if you are Married filing jointly; and
over $125,000 if you are Married filing separately. You may need to include this amount
when figuring your estimated tax. You may also
request that your employer deduct and withhold
an additional amount of income tax withholding
from your wages on Form W-4.
Enhanced deduction for seniors. If you were
born before January 2, 1962, you may be eligible for an enhanced deduction for seniors. Your
Net Investment Income Tax (NIIT). You may
be subject to NIIT. NIIT is a 3.8% tax on the
lesser of net investment income or the excess of
Publication 505 (2026)
Chapter 1
Tax Withholding for 2026
your MAGI over $200,000 ($250,000 if Married
filing jointly or Qualifying surviving spouse;
$125,000 if Married filing separately). NIIT may
need to be included when figuring estimated
tax. You may also request that your employer
deduct and withhold an additional amount of income tax withholding from your wages on Form
W-4.
Access your online account. Go to IRS.gov/
Account to securely access information about
your federal tax account.
• View the amount you owe and a breakdown by tax year.
• See payment plan details or apply for a
new payment plan.
• Make a payment and view 5 years of payment history and any pending or scheduled payments.
• Access your tax records, including key
data from your most recent tax return, your
economic impact payment amounts, and
transcripts.
• View digital copies of select notices from
the IRS.
• Approve or reject authorization requests
from tax professionals.
• Update your address or manage your communication preferences.
Photographs of missing children. The IRS is
a proud partner with the National Center for
Missing & Exploited Children® (NCMEC). Photographs of missing children selected by the
Center may appear in this publication on pages
that would otherwise be blank. You can help
bring these children home by looking at the
photographs and calling 800-THE-LOST
(800-843-5678) if you recognize a child.
1.
Tax Withholding
for 2026
Introduction
This chapter discusses income tax withholding
on:
• Salaries and wages,
• Tips,
• Taxable fringe benefits,
• Sick pay,
• Pensions and annuities,
• Gambling winnings,
• Unemployment compensation, and
• Certain federal payments.
This chapter explains in detail the rules for withholding tax from each of these types of income.
The discussion of salaries and wages includes
an explanation of how to complete Form W-4.
This chapter also covers backup withholding
on interest, dividends, and other payments.
3
Useful Items
You may want to see:
Form (and Instructions)
W-4 Employee’s Withholding Certificate
a period of more than 30 days will be subject to
income tax withholding but not subject to social
security or Medicare taxes. The wages and
withholding will be reported on Form W-2,
Wage and Tax Statement.
W-4
W-4P Withholding Certificate for Periodic
Pension or Annuity Payments
W-4P
W-4R Withholding Certificate for
Nonperiodic Payments and Eligible
Rollover Distributions
W-4R
W-4S Request for Federal Income Tax
Withholding From Sick Pay
W-4S
W-4V Voluntary Withholding Request
W-4V
See How To Get Tax Help at the end of this publication for information about getting these publications and forms.
Salaries and Wages
Income tax is withheld from the pay of most employees. Your pay includes your regular pay, bonuses, commissions, and vacation allowances.
It also includes reimbursements and other expense allowances paid under a nonaccountable
plan. See Supplemental Wages, later, for definitions of accountable and nonaccountable plans.
If your income is low enough that you won’t
have to pay income tax for the year, you may be
exempt from withholding. This is explained under Exemption From Withholding, later.
You can ask your employer to withhold income tax from noncash wages and other wages
not subject to withholding. If your employer
does not agree to withhold tax, or if not enough
is withheld, you may have to pay estimated tax,
as discussed in chapter 2.
Military retirees. Military retirement pay is
treated in the same manner as regular pay for
income tax withholding purposes, even though
it is treated as a pension or annuity for other tax
purposes.
Household workers. If you are a household
worker, you can ask your employer to withhold
income tax from your pay. A household worker
is an employee who performs household work
in a private home, local college club, or local fraternity or sorority chapter.
Tax is withheld only if you want it withheld
and your employer agrees to withhold it. If you
don’t have enough income tax withheld, you
may have to pay estimated tax, as discussed in
chapter 2.
Farmworkers. Generally, income tax is withheld from your cash wages for work on a farm
unless your employer both:
• Pays you cash wages of less than $150
during the year, and
• Has expenditures for agricultural labor totaling less than $2,500 during the year.
Differential wage payments. When employees are on leave from employment for military
duty, some employers make up the difference
between the military pay and civilian pay. Payments to an employee who is on active duty for
4
Determining Amount of Tax
Withheld Using Form W-4
The amount of income tax your employer withholds from your regular pay depends on three
things.
• The amount you earn in each payroll period.
• Your payroll period.
• The information you give your employer on
Form W-4.
Form W-4 includes four steps that will give
information to your employer to figure your withholding. Complete Steps 2 through 4 only if they
apply to you.
Step 1. Enter your personal information, including your anticipated filing status. Your anticipated filing status will determine the standard
deduction and tax rates used to figure your
withholding.
Step 2. Complete this step if you (1) hold more
than one job at a time or (2) are married and
plan to file a joint return and your spouse also
works.
If you or your spouse has another job,
complete Steps 3 through 4(b) on only
CAUTION one Form W-4. Your withholding will be
most accurate if you do this on the Form W-4 for
the highest paying job.
!
Step 3. Complete this step if you have dependents and think you may be eligible to claim the
child tax credit or credit for other dependents on
your tax return. Also, complete this step if you
want to include an estimate of your other tax
credits (for example, an education credit or the
foreign tax credit).
Step 4. Complete this optional step to make
other adjustments.
• Other income (not from jobs).
• Deductions (other than the basic standard
deduction). Enter amounts on this step if
you want to reduce your withholding to account for the additional standard deduction
for those age 65 and over, your itemized
deductions, as well as (for example) the
deductions for qualified tips, qualified overtime compensation, qualified passenger
vehicle loan interest, and/or the enhanced
deduction for seniors.
• Any additional amounts you want to withhold from each check.
New Job
When you start a new job, you must fill out a
Form W-4 and give it to your employer. Your
employer should have copies of the form. If you
need to change the information later, you must
fill out a new form.
If you work only part of the year (for example, you start working after the beginning of the
Chapter 1
Tax Withholding for 2026
year), too much tax may be withheld. You may
be able to avoid overwithholding if your employer agrees to use the part-year method. See
Part-Year Method, later, for more information.
Employee also receiving pension income. If
you receive pension or annuity income and begin a new job, you will need to file Form W-4
with your new employer. You should also consider furnishing a new Form W-4P.
Changing Your Withholding
During the year, changes may occur to your
marital status, adjustments, deductions, or
credits you expect to claim on your tax return.
When this happens, you may need to give your
employer a new Form W-4 to change your withholding.
If a change in personal circumstances reduces the amount of withholding you are entitled to claim, you are required to give your employer a new Form W-4 within 10 days after the
change occurs.
The following rules apply in determining
whether you are required to furnish a new Form
W-4 to your employer.
Change of status resulting in withholding
less than your tax liability. If you have one of
the changes in the following bullet list and you
won’t have enough tax withheld for the remainder of 2026 to cover your income tax liability for
2026, you are required to furnish a new Form
W-4 to your employer within 10 days after the
date of the change.
• Your filing status changes from Married filing jointly (or Qualifying surviving spouse)
to Head of household or Single (or Married
filing separately) or from Head of household to Single (or Married filing separately).
• You or your spouse start another job, and
you chose to use the Multiple Jobs Worksheet or the Tax Withholding Estimator to
account for your other job in determining
your withholding.
• You or your spouse start another job, and
as a result file a new 2026 Form W-4, and
you or your spouse select the checkbox in
Step 2(c) (in this case, you must furnish a
new Form W-4 for your first job and select
the checkbox in Step 2(c)).
• You or your spouse expect a raise of more
than $10,000 in regular wages (not a bonus) at a second or third job, and the Form
W-4, Step 2(c), checkbox is not selected
on your Forms W-4.
• You no longer expect to be able to claim a
Child Tax Credit you took into account on a
previously furnished Form W-4.
• Your other credits you took into account on
a previously furnished Form W-4 decrease
by more than $500.
• Your deductions decrease by more than
$2,300 from the amount you took into account on a previously furnished Form W-4.
• You no longer reasonably expect to claim
exemption from withholding.
Change of status resulting in withholding
that will cover your tax liability. If you have a
change of status listed in the previous section,
Publication 505 (2026)
you don’t have to furnish a new Form W-4 for
2026 if after the change you will have enough
tax withheld for the remainder of 2026 to cover
your income tax liability. However, if you will
have enough tax withheld for 2026 to cover your
income tax liability after a change or changes in
status, but your filing status changes from Married filing jointly (or Qualifying surviving spouse)
to Head of household or to Single (or Married
filing separately) or from Head of household to
Single (or Married filing separately) during
2026, you are required to furnish your employer
a new Form W-4 for 2027 by December 1,
2026, or, if later, 10 days after the date of the
change in filing status, to take effect in 2027.
Otherwise, if you want to change your withholding for any other reason, you can generally
do that whenever you wish. See Table 1-1 for
examples of personal and financial changes
you should consider.
Table 1-1. Personal and Financial
Changes
Factor
Examples
Lifestyle
change
Marriage
Divorce
Birth or adoption of child
Purchase of a new home
Retirement
Filing chapter 11 bankruptcy
Wage income
You can use the Tax Withholding Esti-
TIP mator at IRS.gov/W4App instead of the
worksheets in this publication or included with Form W-4 to determine whether you
need to have your withholding increased or decreased.
You should try to have your withholding
match your actual tax liability. If not enough tax
is withheld, you will owe tax at the end of the
year and may have to pay interest and a penalty. If too much tax is withheld, you will lose the
use of that money until you get your refund. Always check your withholding if there are personal or financial changes in your life or
changes in the law that might change your tax liability. See Table 1-1 for examples.
Note: You can’t give your employer a payment to cover federal income tax withholding on
salaries and wages for past pay periods or a
payment for estimated tax.
When Should You Check Your
Withholding?
The earlier in the year you check your withholding, the easier it is to get the right amount of tax
withheld.
You should check your withholding when
any of the following situations occur.
You or your spouse start or
stop working or start or stop a
second job
1. You receive a paycheck stub (statement)
covering a full pay period in 2026 showing
tax withheld based on 2026 tax rates.
Change in the
amount of
taxable
income not
subject to
withholding
Interest income
Dividends
Capital gains
Self-employment income
IRA (including certain Roth
IRA) distributions
2. You prepare your 2025 tax return and get
a:
Change in the
amount of
adjustments to
income
IRA deduction
Student loan interest
deduction
Alimony expense
Change in the
amount of
itemized
deductions or
tax credits
Medical expenses
Taxes
Interest expense
Gifts to charity
Dependent care expenses
Education credit
Child tax credit
Earned income credit
If you change the amount of your withholding, you can request that your employer withhold using the Cumulative Wage Method, later.
Checking Your Withholding
After you have given your employer a Form
W-4, you can check to see whether the amount
of tax withheld from your pay is too much or too
little. If too much or too little tax is being withheld, you should give your employer a new
Form W-4 to change your withholding. You can
get a blank Form W-4 from your employer or
print the form from IRS.gov.
Publication 505 (2026)
a. Big refund, or
b. Balance due that is:
i. More than you can comfortably
pay, or
ii. Subject to a penalty.
3. There are changes in your life or financial
situation that affect your tax liability. See
Table 1-1.
4. There are changes in the tax law that affect your tax liability.
How Do You Check Your
Withholding?
You can use the worksheets and tables in this
publication to see if you are having the right
amount of tax withheld. You can also use the
Tax Withholding Estimator at IRS.gov/W4App. If
you use the worksheets and tables in this publication, follow these steps.
1. Fill out Worksheet 1-3 to project your total
federal income tax liability for 2026.
2. Fill out Worksheet 1-5 to project your total
federal withholding for 2026 and compare
that with your projected tax liability from
Worksheet 1-3.
If you are not having the correct amount of
tax withheld, line 6 of Worksheet 1-5 will show
you how to adjust the amount withheld each
payday. For ways to increase the amount of tax
Chapter 1
Tax Withholding for 2026
withheld, see How Do You Increase Your Withholding, later.
If line 5 of Worksheet 1-5 shows that you are
having more tax withheld than necessary, see
How Do You Decrease Your Withholding, later,
for ways to decrease the amount of tax you
have withheld each payday.
Detailed instructions for completing a new
Form W-4 to adjust your withholding follow
Worksheet 1-5.
How Do You Increase Your
Withholding?
You can increase your withholding by entering
an additional amount that you want withheld
from each paycheck on Form W-4.
Requesting an additional amount be withheld. You can request that an additional
amount be withheld from each paycheck by entering the additional amount in Step 4(c) of
Form W-4. To see if you should request an additional amount be withheld, complete Worksheets 1-3 and 1-5. Complete a new Form W-4
if the amount on Worksheet 1-5, line 5:
1. Is more than you want to pay with your tax
return or in estimated tax payments
throughout the year, or
2. Would cause you to pay a penalty when
you file your tax return for 2026.
What if I have more than one job or my
spouse also has a job? You are more likely to
need to increase your withholding if you have
more than one job or if you are married filing
jointly and your spouse also works. If this is the
case, you can increase your withholding for one
or more of the jobs.
You can apply the amount on Worksheet
1-5, line 5, to only one job or divide it between
the jobs any way you wish. For each job, determine the extra amount that you want to apply to
that job and divide that amount by the number
of paydays remaining in 2026 for that job. This
will give you the additional amount to enter on
the Form W-4 you will file for that job. You need
to give your employer a new Form W-4 for each
job for which you are changing your withholding.
Example. You work in a store and earn
$46,000 a year. Your spouse works in a factory,
earns $68,000 a year, and has 49 pay periods
left. In 2026, you will also have $184 in taxable
interest and $1,000 of other taxable income.
You expect to file a joint income tax return. You
and your spouse complete Worksheets 1-3,
1-4, and 1-5. Line 5 of Worksheet 1-5 shows
that you will owe an additional $4,459 after subtracting your withholding for the year. You can
divide the $4,459 any way you want. You can
enter an additional amount on either of your
Forms W-4 or divide it between the two of you.
You decide to have the additional amount withheld from your spouse’s wages, so your spouse
enters $91 ($4,459 ÷ 49 remaining paydays) on
their Form W-4 in Step 4(c).
5
Table 1-2. Tax Credits for 2026
For more information about the...
See...
Adoption credit, including the refundable portion
Instructions for Form 8839
Credit for child and dependent care expenses
Pub. 503, Child and Dependent Care Expenses
Child tax credit (including the additional child tax credit)
2025 Instructions for Schedule 8812 (Form 1040)
Credit for other dependents
2025 Instructions for Schedule 8812 (Form 1040)
Earned income credit
Pub. 596, Earned Income Credit (EIC)
Education credits
Pub. 970, Tax Benefits for Education
Credit for the elderly or the disabled
Pub. 524, Credit for the Elderly or the Disabled
Foreign tax credit (except any credit that applies to wages not subject to
U.S. income tax withholding because they are subject to income tax
withholding by a foreign country)
Pub. 514, Foreign Tax Credit for Individuals
General business credit
Form 3800, General Business Credit
Mortgage interest credit
Pub. 530, Tax Information for Homeowners
Qualified electric vehicle credit
Form 8834
Credit for prior year minimum tax (if you paid alternative minimum tax in an
earlier year)
Instructions for Form 8801
Retirement savings contributions credit (saver’s credit)
Pub. 590-A, Contributions to Individual Retirement Arrangements (IRAs)
Credit to holders of tax credit bonds
Instructions for Form 8912
Premium tax credit
Pub. 974, Premium Tax Credit (PTC)
How Do You Decrease Your
Withholding?
If your completed Worksheets 1-3 and 1-5 show
that you may have more tax withheld than your
projected tax liability for 2026, you may be able
to decrease your withholding by following the instructions in Worksheet 1-5.
Tax Credits
Table 1-2 shows many of the tax credits you
may be able to use to decrease your withholding. For a complete list of credits you may be
able to claim, see the 2025 Instructions for
Form 1040.
Step 3 of Form W-4 provides instructions for
determining the amount of the child tax credit
and the credit for other dependents. You can
also include other tax credits in Step 3 of Form
W-4. To do so, complete Worksheet 1-6 and
add the amount from line 11 of that worksheet
to the amount you are entering for other dependents in Step 3 of Form W-4. Including
these credits will increase your paycheck and
reduce the amount of any refund you may receive when you file your tax return.
When Will Your New Form W-4 Go
Into Effect?
If the change is for the current year, your employer must put your new Form W-4 into effect
no later than the start of the first payroll period
ending on or after the 30th day after the day on
which you give your employer your revised
Form W-4.
If the change is for next year, your new Form
W-4 won’t take effect until next year.
Form W-4P
When you first began receiving your pension,
you told the payer how much tax to withhold, if
any, by completing Form W-4P, Withholding
Certificate for Pension or Annuity Payments (or
similar form). However, if your retirement pay is
from the military or certain deferred compensation plans, you completed Form W-4 instead of
Form W-4P. You completed either form based
on your projected income at that time. If you are
returning to the workforce, your new Form W-4
(given to your employer) and your Form W-4 or
W-4P (on file with your pension plan) must work
together to determine the correct amount of
withholding for your new amount of income.
Form W-4P includes four steps that will give
information to the payer of your pension or annuity for how to figure your withholding. Complete Steps 2 through 4 only if they apply to you.
Step 1. Enter your personal information, including your anticipated filing status. Your anticipated filing status will determine the standard
deduction and tax rates used to figure your
withholding.
Step 2. Complete this step if you (1) have income from a job or more than one pension/
annuity and/or (2) are married filing jointly and
your spouse receives income from a job or a
pension/annuity.
If you (or if married filing jointly, you
and/or your spouse) have a job(s),
CAUTION don’t complete Steps 3 through 4b on
Form W-4P. Instead, complete Steps 3 through
4b on the Form W-4 for the job. If you (or if married filing jointly, you and your spouse) don’t
have a job, complete Steps 3 through 4b on
Form W-4P for only the pension or annuity that
pays the most annually. Leave those steps
blank for the other pensions or annuities.
!
Step 3. Complete this step if you have dependents and think you may be eligible to claim the
child tax credit or credit for other dependents on
your tax return. Also, complete this step if you
want to include an estimate of your other tax
credits (for example, an education credit or the
foreign tax credit).
Step 4. Complete this step to make other adjustments.
• Other estimated income (Step 4a).
• Deductions (other than the basic standard
deduction) you expect to claim. Enter
amounts on this step if you want to reduce
your withholding to account for the additional standard deduction for those age 65
and over, your itemized deductions, as well
as (for example) the deductions for qualified tips, qualified overtime compensation,
qualified passenger vehicle loan interest,
the enhanced deduction for seniors. Use
the Step 4(b)—Deductions Worksheet in
the instructions for Form W-4P to help you
determine the amount to enter on line 4b.
• Any additional amounts you want to withhold from each payment (Step 4c).
Note: If you don’t give Form W-4P to your
payer, you don’t provide an SSN, or the IRS notifies the payer that you gave an incorrect SSN,
then the payer will withhold tax from your payments as if your filing status is Single with no
adjustments in Steps 2 through 4. For payments
that began before 2026, your current withholding election (or your default rate) remains in effect unless you submit a new Form W-4P.
And remember, this isn’t a final decision. If
you don’t get the correct amount of withholding
with the first Forms W-4 and W-4P you submit,
you should refigure your withholding using the
information and worksheets in this publication
or the resources mentioned above.
You should go through this same process
each time your life situation changes, whether it
6
Chapter 1
Tax Withholding for 2026
Publication 505 (2026)
be for personal or financial reasons. You may
need more tax withheld, or you may need less.
Getting the Right Amount
of Tax Withheld
In most situations, the tax withheld from your
pay will be close to the tax you figure on your return if you follow these two rules.
• You accurately complete all the Form W-4
worksheets that apply to you.
• You give your employer a new Form W-4
when changes occur.
But because the worksheets and withholding methods don’t account for all possible situations, you may not be getting the right amount
withheld. This is most likely to happen in the following situations.
• You are married and both you and your
spouse work.
• You have more than one job at a time.
• You have nonwage income, such as interest, dividends, alimony, or unemployment
compensation.
• You will owe additional amounts with your
return.
• Your withholding is based on obsolete
Form W-4 information for a substantial part
of the year.
• You work only part of the year.
• You change the amount of your withholding
during the year.
• You are subject to Additional Medicare Tax
or NIIT. If you anticipate liability for Additional Medicare Tax or NIIT, you may request that your employer withhold an additional amount of income tax withholding on
Form W-4.
If any of these situations apply to you, you
can use the Tax Withholding Estimator at
IRS.gov/W4App to see if you need to change
your withholding.
If you have self-employment income or owe
self-employment tax, you should use the worksheets in this publication to determine if you
should pay estimated tax.
Part-Year Method
If you work only part of the year and your employer agrees to use the part-year withholding
method, less tax will be withheld from each
wage payment than would be withheld if you
worked all year. To be eligible for the part-year
method, you must meet both of the following requirements.
• You must use the calendar year (the 12
months from January 1 through December
31) as your tax year. You can’t use a fiscal
year.
• You must not expect to be employed for
more than 245 days during the year. To figure this limit, count all calendar days that
you are employed (including weekends,
vacations, and sick days) beginning with
the first day you are on the job for pay and
ending with your last day of work. If you are
temporarily laid off for 30 days or less,
count those days too. If you are laid off for
more than 30 days, don’t count those days.
You won’t meet this requirement if you
Publication 505 (2026)
begin working before May 1 and expect to
work for the rest of the year.
How to apply for the part-year method. You
must ask your employer in writing to use this
method. The request must state all three of the
following.
• The date of your last day of work for any
prior employer during the current calendar
year.
• That you don’t expect to be employed
more than 245 days during the current calendar year.
• That you use the calendar year as your tax
year.
Cumulative Wage Method
If you change your withholding during the year,
too much or too little tax may have been withheld for the period before you made the change.
You may be able to compensate for this if your
employer agrees to use the cumulative wage
withholding method for the rest of the year. You
must ask your employer in writing to use this
method.
To be eligible, your payroll periods (weekly,
biweekly, etc.) must have been the same since
the beginning of the year.
Aids for Figuring Your Withholding
Tax Withholding Estimator. If you are concerned that you may be having too much or too
little income tax withheld from your pay, the IRS
provides a withholding estimator on its website.
Go to IRS.gov/W4App. It can help you determine the correct amount to be withheld any time
during the year.
Rules Your Employer
Must Follow
It may be helpful for you to know some of the
withholding rules your employer must follow.
These rules can affect how to fill out your Form
W-4 and how to handle problems that may
arise.
New Form W-4. When you start a new job,
your employer should give you a Form W-4 to fill
out. Beginning with your first payday, your employer will use the information you give on the
form to figure your withholding.
If you later fill out a new Form W-4, your employer can put it into effect as soon as possible.
The deadline for putting it into effect is the start
of the first payroll period ending 30 or more
days after you turn it in.
No Form W-4. If you don’t give your employer
a Form W-4, your employer should treat you as
though you checked the box for “Single” or
“Married filing separately” in Step 1(c) and
made no entries in Step 2, Step 3, or Step 4 of
the 2026 Form W-4.
Repaying withheld tax. If you find you are
having too much tax withheld because you
didn’t account for all your dependents or deductions you are entitled to, you should give your
employer a new Form W-4. Your employer can’t
Chapter 1
Tax Withholding for 2026
repay any of the tax previously withheld. Instead, claim the full amount withheld when you
file your tax return.
However, if your employer has withheld
more than the correct amount of tax for the
Form W-4 you have in effect, you don’t have to
fill out a new Form W-4 to have your withholding
lowered to the correct amount. Your employer
can repay the amount that was withheld incorrectly. If you are not repaid, your Form W-2 will
reflect the full amount actually withheld, which
you would claim when you file your tax return.
IRS review of your withholding. Your withholding or any claim for a complete exemption
from withholding is subject to review by the IRS.
Your employer may be required to send a copy
of the Form W-4 to the IRS. There is a penalty
for supplying false information on Form W-4.
See Penalties, later.
If the IRS determines that you have overstated your withholding or can’t claim a complete
exemption from withholding, the IRS will issue a
notice that specifies the withholding arrangement permitted for the employee (commonly referred to as a “lock-in letter”) to both you and
your employer.
The IRS will provide a period of time during
which you can dispute the determination before
your employer adjusts your withholding. If you
believe that you are entitled to claim complete
exemption from withholding or that the IRS determination was otherwise incorrect, you must
submit a new Form W-4 and a written statement
to support your claims made on Form W-4 that
would decrease federal income tax withholding
to the IRS. Contact information (a toll-free number and an IRS office address) will be provided
in the lock-in letter. At the end of this period, if
you haven’t responded or if your response isn’t
adequate, your employer will be required to
withhold based on the original lock-in letter.
After the lock-in letter takes effect, your employer must withhold tax on the basis of the
withholding rate (marital status) and maximum
withholding specified in that letter.
If you later believe that you are entitled to
claim exemption from withholding or otherwise
adjust your withholding, you can complete a
new Form W-4 and a written statement to support the claims made on the Form W-4 and
send them directly to the IRS address shown on
the lock-in letter. Your employer must continue
to figure your withholding on the basis previously determined by the IRS until the IRS advises your employer otherwise.
At any time, either before or after the lock-in
letter becomes effective, you may give your employer a new Form W-4 that does not claim
complete exemption from withholding and results in more income tax withheld than specified
in the lock-in letter. Your employer must then
withhold tax based on this new Form W-4.
Additional information is available at
IRS.gov.
Enter
‘withholding
compliance
questions’ in the search box.
Exemption From Withholding
If you claim exemption from withholding, your
employer won’t withhold federal income tax
from your wages. The exemption applies only to
7
Figure 1-A. Exemption From Withholding on Form W-4
Note: Don’t use this chart if you are 65 or older or blind, or if you will itemize your deductions or claim tax credits. Instead, see
the discussions in this chapter under Exemption From Withholding. If none of these situations apply to you, but you have
adjustments to income, use the 2026 Estimated Tax Worksheet.
Start Here
For 2025, did you have a
right to a refund of ALL
federal income tax withheld
because you had NO tax
liability?
You CAN’T claim
exemption from
withholding.
No
Yes
Yes
Will your 2026 total income be more than the amount shown below for
your filing status?
For 2026, will
someone (such as
your parent) be able
to claim you as a
dependent?
Single
Head of household
Married filing separately for
BOTH 2025 and 2026
Other married status (include BOTH
spouses’ income whether filing
separately or jointly)
Qualifying surviving spouse
No
Yes
Will your 2026 income
be more than $1,350?
$16,100
24,150
16,100
32,200
32,200
No
No
Yes
Will your 2026 income
include more than $450
of unearned income
(interest, dividends, etc.)?
Yes
You CAN’T claim
exemption from
withholding.
No
No
Will your 2026 total income be
$16,100 or less?
income tax, not to social security or Medicare
tax.
You can claim exemption from withholding
for 2026 only if both of the following situations
apply.
• For 2025, you had a right to a refund of all
federal income tax withheld because you
had no tax liability.
• For 2026, you expect a refund of all federal
income tax withheld because you expect to
have no tax liability.
Use Figure 1-A to help you decide whether
you can claim exemption from withholding.
Don’t use Figure 1-A if you:
• Are 65 or older,
• Are blind,
8
You CAN claim
exemption from
withholding.
Yes
• Will itemize deductions on your 2026 re-
turn, or
• Will claim any tax credits on your 2026 return.
These situations are discussed later.
Students. If you are a student, you are not automatically exempt. If you work only part time or
during the summer, you may qualify for exemption from withholding.
Example 1. You are a high school student
and expect to earn $2,500 from a summer job.
You don’t expect to have any other income during the year, and your parents will be able to
claim you as a dependent on their tax return.
You worked last summer and had $375 federal
Chapter 1
Tax Withholding for 2026
income tax withheld from your pay. The entire
$375 was refunded when you filed your 2025 return. Using Figure 1-A, you find that you can
claim exemption from withholding.
Example 2. The facts are the same as in
Example 1, except that you also have a savings
account and expect to have $475 interest income during the year. Using Figure 1-A, you
find that you can’t claim exemption from withholding because your unearned income will be
more than $450 and your total income will be
more than $1,350.
!
CAUTION
return.
You may have to file a tax return, even if
you are exempt from withholding. See
Pub. 501 to see whether you must file a
Publication 505 (2026)
Age 65 or older or blind. If you are 65
or older or blind, use Worksheet 1-1 or
Worksheet 1-2 to help you decide
whether you can claim exemption from withholding. Don’t use either worksheet if you will
itemize deductions or claim tax credits on your
2026 return. Instead, see Itemizing deductions
or claiming credits next.
Itemizing deductions or claiming credits. If
you had no tax liability for 2025, and you will:
• Itemize deductions, or
• Claim a tax credit,
use Worksheet 2-1 (also, see chapter 2) to figure your 2026 expected tax liability. You can
claim exemption from withholding only if your total expected tax liability (line 11c of the worksheet) is zero.
Claiming exemption from withholding. To
claim exemption, you must give your employer a
Form W-4. Check the box on the form in the
space marked “Exempt from withholding” below
Step 4(c) and complete Steps 1(a), 1(b), and 5.
Don’t complete any other steps.
If you claim exemption but later your situation changes so that you will have to pay income tax after all, you must file a new Form W-4
within 10 days after the change. If you claim exemption in 2026 but you expect to owe income
tax for 2027, you must file a new Form W-4 by
December 1, 2026.
Your claim of exempt status may be reviewed by the IRS. See IRS review of your withholding, earlier.
An exemption is good for only 1 year.
You must give your employer a new Form W-4
by February 15 each year to continue your exemption.
Supplemental Wages
Supplemental wages include bonuses, commissions, overtime pay, vacation allowances, certain sick pay, and expense allowances under
certain plans. The payer can figure withholding
on supplemental wages using the same method
used for your regular wages. However, if these
payments are identified separately from regular
wages, your employer or other payer of supplemental wages can withhold income tax from
these wages at a 22% flat rate under certain circumstances, as explained in the section on supplemental wages in Pub. 15.
Expense allowances. Reimbursements or
other expense allowances paid by your employer under a nonaccountable plan are treated
as supplemental wages. A nonaccountable plan
is a reimbursement arrangement that does not
require you to account for or prove your business expenses to your employer or does not require you to return your employer’s payments
that are more than your proven expenses.
Reimbursements or other expense allowances paid under an accountable plan that are
more than your proven expenses are treated as
paid under a nonaccountable plan if you don’t
return the excess payments within a reasonable
period of time.
Publication 505 (2026)
Accountable plan. To be an accountable plan,
your employer’s reimbursement or allowance arrangement must include all three of the following rules.
• Your expenses must have a business connection. That is, you must have paid or incurred deductible expenses while performing services as an employee of your
employer.
• You must adequately account to your employer for these expenses within a reasonable period of time.
• You must return any excess reimbursement
or allowance within a reasonable period of
time.
An excess reimbursement or allowance is
any amount you are paid that is more than the
business-related expenses that you adequately
accounted for to your employer.
The definition of reasonable period of time
depends on the facts and circumstances of your
situation. However, regardless of those facts
and circumstances, actions that take place
within the times specified in the following list will
be treated as taking place within a reasonable
period of time.
• You receive an advance within 30 days of
the time you have an expense.
• You adequately account for your expenses
within 60 days after they were paid or incurred.
• You return any excess reimbursement
within 120 days after the expense was paid
or incurred.
• You are given a periodic statement (at least
quarterly) that asks you to either return or
adequately account for outstanding advances and you comply within 120 days of the
statement.
Nonaccountable plan. Any plan that does not
meet the definition of an accountable plan is
considered a nonaccountable plan.
For more information about accountable and
nonaccountable plans, see chapter 6 of Pub.
463.
Penalties
You may have to pay a penalty of $500 if both of
the following apply.
• You make statements on your Form W-4
that reduce the amount of tax withheld.
• You have no reasonable basis for those
statements at the time you prepare your
Form W-4.
There is also a criminal penalty for willfully
supplying false or fraudulent information on your
Form W-4 or for willfully failing to supply information that would increase the amount withheld. The penalty upon conviction can be either
a fine of up to $1,000 or imprisonment for up to
1 year or both.
These penalties will apply if you deliberately
and knowingly falsify your Form W-4 in an attempt to reduce or eliminate the proper withholding of taxes. A simple error or an honest
mistake won’t result in one of these penalties.
Chapter 1
Tax Withholding for 2026
Tips
The tips you receive while working on your job
are considered part of your pay. You must include your tips on your tax return on the same
line as your regular pay. However, tax isn’t withheld directly from tip income, as it is from your
regular pay. Nevertheless, your employer will
take into account the tips you report when figuring how much to withhold from your regular pay.
Beginning January 1, 2026, an em-
TIP ployer will use an employee’s updated
2026 Form W-4, if one is submitted by
the employee, and the federal income tax withholding procedures in Pub. 15-T to allow employees to account for their expected deduction
and receive more money in each paycheck instead of waiting until filing their Form 1040 or
1040-SR to receive the benefit of this deduction.
Reporting tips to your employer. If you receive tips of $20 or more in a month while working for any one employer, you must report to
your employer the total amount of tips you receive on the job during the month. The report is
due by the 10th day of the following month.
If you have more than one job, make a separate report to each employer. Report only the
tips you received while working for that employer and only if they total $20 or more for the
month.
How employer figures amount to withhold.
The tips you report to your employer are counted as part of your income for the month you report them. Your employer can figure your withholding in either of two ways.
• By withholding at the regular rate on the
sum of your pay plus your reported tips.
• By withholding at the regular rate on your
pay plus a percentage of your reported
tips.
Not enough pay to cover taxes. If your regular pay isn’t enough for your employer to withhold all the tax (including income tax and social
security and Medicare taxes (or the equivalent
railroad retirement tax)) due on your pay plus
your tips, you can give your employer money to
cover the shortage.
If you don’t give your employer money to
cover the shortage, your employer first withholds as much Medicare tax and social security
or railroad retirement tax as possible, up to the
proper amount, and then withholds income tax
up to the full amount of your pay. If not enough
tax is withheld, you may have to pay estimated
tax. When you file your return, you may also
have to pay any Medicare and social security
tax or railroad retirement tax your employer
could not withhold.
Tips not reported to your employer. On your
tax return, you must report all the tips you receive during the year, even tips you don’t report
to your employer (this includes the value of any
noncash tips you received, such as tickets,
passes, or other items of value). Make sure you
are having enough tax withheld or are paying
9
enough estimated tax (see chapter 2), to cover
all your tip income.
Allocated tips. If you work in a large food or
beverage establishment, your employer may
have to report an allocated amount of tips on
your Form W-2.
Your employer should not withhold income
tax, Medicare tax, and social security or railroad
retirement tax on the allocated amount. Withholding is based only on your pay plus your reported tips. Your employer should refund to you
any incorrectly withheld tax.
How your tips are reported. Beginning in
2026, your Form(s) W-2 should have your qualified tip income separately reported in box 12,
code TP. In addition, your Form(s) W-2, box 14b
should include the relevant Treasury Tipped Occupation Code for the occupation in which you
earned the tips. If you receive a Form
1099-MISC, tips should be reported in box 13a,
Form 1099-NEC, box 1b, and Form 1099-K,
box 1c.
More information. For more information on
the reporting and withholding rules for tip income and on tip allocation, see Pub. 531.
Taxable Fringe Benefits
The value of certain noncash fringe benefits you
receive from your employer is considered part
of your pay. Your employer must generally withhold income tax on these benefits from your
regular pay.
Although the value of your personal use of
an employer-provided car, truck, or other highway motor vehicle is taxable, your employer can
choose not to withhold income tax on that
amount. Your employer must notify you if this
choice is made.
When benefits are considered paid. Your
employer can choose to treat a fringe benefit as
paid by the pay period, by the quarter, or on
some other basis as long as the benefit is considered paid at least once a year. Your employer
can treat the benefit as being paid on one or
more dates during the year, even if you get the
entire benefit at one time.
Special rule. Your employer can choose to
treat a benefit provided during November or December as paid in the next year. Your employer
must notify you if this rule is used.
Example. Your employer considers the
value of benefits paid from November 1, 2024,
through October 31, 2025, as paid to you in
2025. To determine the total value of benefits
paid to you in 2026, your employer will add the
value of any benefits paid in November and December of 2025 to the value of any benefits paid
in January through October of 2026.
Exceptions. Your employer can’t choose
when to withhold tax on the transfer of either
real property or personal property of a kind normally held for investment (such as stock). Your
employer must withhold tax on these benefits at
the time of the transfer.
10
How withholding is figured. Your employer
can either add the value of a fringe benefit to
your regular pay and figure income tax withholding on the total or withhold a flat 22% of the
benefit’s value.
If the benefit’s actual value can’t be determined when it is paid or treated as paid, your
employer can use a reasonable estimate. Your
employer must determine the actual value of the
benefit by January 31 of the next year. If the actual value is more than the estimate, your employer must pay the IRS any additional withholding tax required. Your employer has until
April 1 of that next year to recover from you the
additional income tax paid to the IRS for you.
How your employer reports your benefits.
Your employer must report on Form W-2 the total of the taxable fringe benefits paid or treated
as paid to you during the year and the tax withheld for the benefits. These amounts can be
shown either on the Form W-2 for your regular
pay or on a separate Form W-2. If your employer provided you with a car, truck, or other
motor vehicle and chose to treat all of your use
of it as personal, its value must be either separately shown on Form W-2 or reported to you on
a separate statement.
More information. For information on fringe
benefits, see Fringe Benefits under Employee
Compensation in Pub. 525.
Sick Pay
Sick pay is a payment to you to replace your
regular wages while you are temporarily absent
from work due to sickness or personal injury. To
qualify as sick pay, it must be paid under a plan
to which your employer is a party.
If you receive sick pay from your employer or
an agent of your employer, income tax must be
withheld. An agent who does not pay regular
wages to you may choose to withhold income
tax at a flat rate.
However, if you receive sick pay from a third
party who isn’t acting as an agent of your employer, income tax will be withheld only if you
choose to have it withheld. See Form W-4S,
later.
If you receive payments under a plan in
which your employer does not participate (such
as an accident or health plan where you paid all
the premiums), the payments are not sick pay
and are usually not taxable.
Union agreements. If you receive sick pay under a collective bargaining agreement between
your union and your employer, the agreement
may determine the amount of income tax withholding. See your union representative or your
employer for more information.
Form W-4S. If you choose to have income tax
withheld from sick pay paid by a third party,
such as an insurance company, you must fill out
Form W-4S. Its instructions contain a worksheet
you can use to figure the amount you want withheld. They also explain restrictions that may apply.
Chapter 1
Tax Withholding for 2026
Give the completed form to the payer of your
sick pay. The payer must withhold according to
your directions on the form.
Form W-4S remains in effect until you
change or cancel it, or stop receiving payments.
You can change your withholding by giving a
new Form W-4S or a written notice to the payer
of your sick pay.
Estimated tax. If you don’t request withholding
on Form W-4S or if you don’t have enough tax
withheld, you may have to pay estimated tax. If
you don’t pay enough tax, either through estimated tax or withholding, or a combination of
both, you may have to pay a penalty. See chapter 2.
Pensions and Annuities
Income tax will usually be withheld from your
pension or annuity distributions unless you
choose not to have it withheld. This rule applies
to distributions from:
• An IRA;
• A life insurance company under an endowment, annuity, or life insurance contract;
• A pension, annuity, or profit-sharing plan;
• A stock bonus plan; and
• Any other plan that defers the time you receive compensation.
The amount withheld depends on whether
you receive payments spread out over more
than 1 year (periodic payments), within 1 year
(nonperiodic payments), or as an eligible rollover distribution (ERD). Income tax withholding
from an ERD is mandatory. ERDs are discussed
under Eligible Rollover Distributions, later.
Nontaxable part. The part of your pension or
annuity that is a return of your investment in
your retirement plan (the amount you paid into
the plan or its cost to you) isn’t taxable. Income
tax won’t be withheld from the part of your pension or annuity that isn’t taxable. The tax withheld will be figured on, and can’t be more than,
the taxable part.
For information about figuring the part of
your pension or annuity that isn’t taxable, see
Pub. 575.
Periodic Payments
Withholding from periodic payments of a pension or annuity is figured similarly to withholding
from certain salaries and wages. To tell the
payer of your pension or annuity how much you
want withheld, fill out Form W-4P or a similar
form provided by the payer. Follow instructions
for Form W-4P and the rules discussed under
Form W-4P, earlier, to fill out your 2026 Form
W-4P.
Note: Use Form W-4, not Form W-4P, if you
receive any of the following.
• Military retirement pay.
• Payments from certain nonqualified deferred compensation plans. These are employer plans that pay part of your compensation at a later time but are not
tax-qualified deferred compensation plans.
See Nonqualified Deferred Compensation
and Section 457 Plans in Pub. 957.
Publication 505 (2026)
Withholding rules. The withholding rules for
pensions and annuities differ from those for salaries and wages in the following ways.
• If a 2026 Form W-4P is used for withholding for payments beginning in 2026, and
you don’t fill out a withholding certificate,
tax will be withheld as if your filing status is
Single with no adjustments made in Steps
2 through 4.
• You can choose not to have tax withheld,
regardless of how much tax you owed last
year or expect to owe this year. You don’t
have to qualify for exemption. See Choosing Not To Have Income Tax Withheld,
later.
• If a 2026 Form W-4P is used for withholding for payments beginning in 2026, and
you don’t give the payer your SSN in the
required manner or the IRS notifies the
payer before any payment or distribution is
made that you gave an incorrect SSN, tax
will be withheld as if your filing status is
Single with no adjustments in Steps 2
through 4. For payments that began before
2026, your current withholding election (or
your default rate) remains in effect unless
you submit a new Form W-4P.
can’t choose withholding at a rate of less than
20% (including “-0-”). Note that the default rate
of withholding may be too low for your tax situation. You may choose to enter a rate higher than
20% on Form W-4R, line 2. Don’t give Form
W-4R to your payer unless you want more than
20% withheld.
Choosing Not To Have
Income Tax Withheld
It does not matter whether your winnings are
paid in cash, in property, or as an annuity. Winnings not paid in cash are taken into account at
their fair market value.
Effective date of withholding certificate. If
you give your withholding certificate (Form
W-4P or a similar form) to the payer on or before
the date your payments start, it will be put into
effect by the first payment made more than 30
days after you submit the certificate.
If you give the payer your certificate after
your payments start, it will be put into effect with
the first payment, which is at least 30 days after
you submit it. However, the payer can elect to
put it into effect earlier.
For payments other than eligible rollover distributions, you can choose not to have income tax
withheld. The payer will tell you how to make
this choice. If you use Form W-4R, enter “-0-”
on line 2 to choose not to have withholding. This
choice will remain in effect until you decide you
want withholding and inform the payer. See Revoking a choice not to have tax withheld, later.
Exception. Gambling winnings from bingo,
keno, and slot machines are generally not subject to income tax withholding. However, you
may need to provide the payer with an SSN to
avoid withholding. See Backup withholding on
gambling winnings, later. If you receive gambling winnings not subject to withholding, you
may need to pay estimated tax. See chapter 2.
The payer must withhold if either of the following applies.
• You don’t give the payer your SSN in the
required manner.
• The IRS notifies the payer, before any payment or distribution is made, that you gave
it an incorrect SSN.
If you don’t pay enough tax, either through
withholding or estimated tax, or a combination
of both, you may have to pay a penalty.
Nonperiodic Payments
Tax will be withheld at a flat 10% rate on any
nonperiodic payments you receive, unless you
choose a different withholding rate.
Use Form W-4R, line 2, to choose a withholding rate other than the default 10% rate.
You can choose a rate between 0% and 100%.
You can choose to have no federal income tax
withheld by entering “-0-” on line 2. Generally,
you can’t choose less than 10% for payments to
be delivered outside of the United States and its
territories. If you want to revoke a choice not to
have tax withheld, see Choosing Not To Have
Income Tax Withheld, later.
Note that the following payments are not eligible rollover distributions for purposes of these
withholding rules:
• Qualifying “hardship” distributions;
• Distributions required by federal law, such
•
•
•
•
•
as required minimum distributions;
Generally, distributions from a pension-linked emergency savings account;
Eligible distributions to a domestic abuse
victim;
Qualified disaster recovery distributions;
Qualified birth or adoption distributions;
and
Emergency personal expense distributions.
If you don’t have any income tax withheld
from your pension or annuity, or if you don’t
have enough withheld, you may have to pay estimated tax. See chapter 2.
If you don’t pay enough tax, either through
estimated tax or withholding, or a combination
of both, you may have to pay a penalty.
Eligible Rollover
Distributions
Payments delivered outside the United
States. You must generally have tax withheld
from pension or annuity benefits delivered outside the United States. However, if you are a
U.S. citizen or resident alien, you can choose
not to have tax withheld if you give the payer of
the benefits a home address in the United
States or in a U.S. territory. The payer must
withhold tax if you provide a U.S. address for a
nominee, trustee, or agent to whom the benefits
are to be delivered, but don’t provide your own
home address in the United States or in a U.S.
territory.
Distributions you receive from qualified retirement 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 20% default rate of withholding
on the taxable amount of the distribution. You
Notice required of payer. The payer of your
pension or annuity must send you a notice telling you about your right to choose not to have
tax withheld.
Generally, the payer won’t send a notice to
you if it is reasonable to believe that the entire
amount you will be paid isn’t taxable.
You may need to use Form W-4R to
ask for additional withholding. If you
CAUTION don’t have enough tax withheld, you
may need to pay estimated tax, as explained in
chapter 2.
!
Publication 505 (2026)
Chapter 1
Tax Withholding for 2026
Revoking a choice not to have tax withheld.
The payer of your pension or annuity will tell you
how to revoke your choice not to have income
tax withheld from periodic or nonperiodic payments. You can tell the payer exactly how much
to withhold by completing a new Form W-4P for
periodic payments or Form W-4R for nonperiodic payments.
Gambling Winnings
Income tax is withheld at a flat 24% rate from
certain kinds of gambling winnings.
Gambling winnings of more than $5,000
from the following sources are subject to income tax withholding.
• Any sweepstakes; wagering pool, including
payments made to winners of poker tournaments; or lottery.
• Any other wager if the proceeds are at
least 300 times the amount of the bet.
Form W-2G. If a payer withholds income tax
from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the
amount withheld.
Report the tax withheld on your 2026 Form
1040 or 1040-SR, along with all other federal income tax withheld, as shown on Forms W-2
and 1099.
Information to give payer. If the payer asks,
you must give the payer all the following information.
• Your name, address, and SSN.
• Whether you made identical wagers (explained below).
• Whether someone else is entitled to any
part of the winnings subject to withholding.
If so, you must complete Form 5754, Statement by Person(s) Receiving Gambling
Winnings, and return it to the payer. The
payer will use it to prepare a Form W-2G
for each of the winners.
Identical wagers. You may have to give the
payer a statement of the amount of your winnings, if any, from identical wagers. If this statement is required, the payer will ask you for it.
You provide this statement by signing Form
W-2G or, if required, Form 5754.
Identical wagers include two bets placed in
a pari-mutuel pool on one horse to win a particular race. However, the bets are not identical if
one bet is “to win” and one bet is “to place.” In
11
addition, they are not identical if the bets were
placed in different pari-mutuel pools. For example, a bet in a pool conducted by the racetrack
and a bet in a separate pool conducted by an
offtrack betting establishment in which the bets
are not pooled with those placed at the track
are not identical wagers.
Backup withholding on gambling winnings.
If you have any kind of gambling winnings and
don’t give the payer your SSN, the payer may
have to withhold income tax at a flat 24% rate.
This rule also applies to winnings of at least
$2,000 from bingo, slot machines, keno, and
certain other gambling winnings.
Unemployment
Compensation
You can choose to have income tax withheld
from unemployment compensation. To make
this choice, fill out Form W-4V (or a similar form
provided by the payer) and give it to the payer.
All unemployment compensation is taxable.
So, if you don’t have income tax withheld, you
may have to pay estimated tax. See chapter 2.
If you don’t pay enough tax, either through
withholding or estimated tax or a combination of
both, you may have to pay a penalty.
Form 1099-G. If you receive $10 or more in unemployment compensation, you will receive a
Form 1099-G, Certain Government Payments.
Box 1 will show the amount of unemployment
compensation you got for the year. Box 4 will
show the amount of federal income tax withheld, if any.
Federal Payments
You can choose to have income tax withheld
from certain federal payments you receive.
These payments are the following.
1. Social security benefits.
2. Tier 1 railroad retirement benefits.
If you don’t choose to have income tax withheld, you may have to pay estimated tax. See
chapter 2.
If you don’t pay enough tax, either through
withholding or estimated tax or a combination of
both, you may have to pay a penalty.
More information. For more information about
the tax treatment of social security and railroad
retirement benefits, see Pub. 915. Get Pub. 225
for information about the tax treatment of commodity credit corporation loans or crop disaster
payments.
Payment to shareholders of Alaska Native
Corporations (ANCs). If you are a shareholder of an ANC, you can request to have income tax withheld from dividends and other distributions you receive from the ANC. To make
this request, fill out Form W-4V (or a similar
form provided by the payer) and give it to the
payer. A request for withholding isn’t effective
until the ANC indicates in writing that it accepts
the request or begins withholding. Contact the
payer if it isn’t clear that the payer has accepted
your Form W-4V.
If you don’t choose to have income tax withheld or the ANC doesn’t accept your request,
you may have to pay estimated tax. See chapter 2.
If you don’t pay enough tax, either through
withholding or estimated tax, or a combination
of both, you may have to pay a penalty.
Backup Withholding
Banks or other businesses that pay you certain
kinds of income must file an information return
(Form 1099) with the IRS. The information return shows how much you were paid during the
year. It also includes your name and taxpayer
identification number (TIN). TINs are explained
later in this discussion.
These payments are generally not subject to
withholding. However, “backup” withholding is
required in certain situations.
6. Any other payment under federal law as
determined by the Secretary.
Payments subject to backup withholding.
Backup withholding can apply to most kinds of
payments that are reported on Form 1099.
These include:
• Interest payments (Form 1099-INT);
• Government payments (Form 1099-G);
• Dividends (Form 1099-DIV);
• Patronage dividends, but only if at least
half the payment is in money (Form
1099-PATR);
• Rents, profits, or other gains (Form
1099-MISC);
• Commissions, fees, or other payments for
work you do as an independent contractor
(Form 1099-NEC);
• Payments by brokers (Form 1099-B);
• Payments by fishing boat operators, but
only the part that is in money and that represents a share of the proceeds of the
catch (Form 1099-MISC); and
• Royalty payments (Form 1099-MISC).
To make this choice, fill out Form W-4V (or a
similar form provided by the payer) and give it to
the payer.
Backup withholding may also apply to gambling
winnings. See Backup withholding on gambling
winnings under Gambling Winnings, earlier.
3. Commodity credit corporation loans you
choose to include in your gross income.
4. Payments under the Agricultural Act of
1949 (7 U.S.C. 1421 et seq.), as amended, or title II of the Disaster Assistance
Act of 1988 that are treated as insurance
proceeds and that you received because:
a. Your crops were destroyed or damaged by drought, flood, or any other
natural disaster; or
b. You were unable to plant crops because of a natural disaster described
in (a).
5. Dividends and other distributions from
Alaska Native Corporations to their shareholders.
12
Chapter 1
Tax Withholding for 2026
Payments not subject to backup withholding. Backup withholding does not apply to payments reported on Form 1099-MISC (other than
payments by fishing boat operators and royalty
payments) unless at least one of the following
three situations applies.
• The amount you receive from any one
payer is $2,000 or more.
• The payer had to give you a Form 1099 last
year.
• The payer made payments to you last year
that were subject to backup withholding.
Form 1099 and backup withholding are generally not required for a payment of less than
$10.
Withholding rules. When you open a new account, make an investment, or begin to receive
payments reported on Form 1099, the bank or
other business will give you Form W-9, Request
for Taxpayer Identification Number and Certification, or a similar form. You must enter your
TIN on the form and, if your account or investment will earn interest or dividends, you must
also certify (under penalties of perjury) that your
TIN is correct and that you are not subject to
backup withholding.
The payer must withhold at a flat 24% rate in
the following situations.
• You don’t give the payer your TIN in the required manner.
• The IRS notifies the payer that the TIN you
gave is incorrect.
• You are required but fail to certify that you
are not subject to backup withholding.
• The IRS notifies the payer to start withholding on interest or dividends because you
have underreported interest or dividends
on your income tax return. The IRS will do
this only after it has mailed you four notices
over at least a 210-day period.
Taxpayer identification number (TIN).
Your TIN is one of the following three numbers.
• An SSN.
• An employer identification number (EIN).
• An IRS individual taxpayer identification
number (ITIN). Aliens who don’t have an
SSN and are not eligible to get one should
get an ITIN. Use Form W-7 to apply for an
ITIN.
An ITIN is for federal tax use only. It does not
entitle you to social security benefits or change
your employment or immigration status under
U.S. law. For more information on ITINs, see
Pub. 1915.
If you have an ITIN that you haven’t included on a tax return in the last 3 conCAUTION secutive years, it may be expired and
you may need to renew it. If your ITIN has expired and you don’t have an SSN, you can make
estimated tax payments before you renew your
ITIN. To renew your ITIN, and for more information, see the Instructions for Form W-7.
!
How to prevent or stop backup withholding.
If you have been notified by a payer that the TIN
you gave is incorrect, you can usually prevent
backup withholding from starting or stop backup
withholding once it has begun by giving the
payer your correct name and TIN. You must certify that the TIN you give is correct.
Publication 505 (2026)
However, the payer will provide additional instructions if the TIN you gave needs to be validated by the Social Security Administration or
by the IRS. This may happen if both the following conditions exist.
1. The IRS notifies the payer twice within 3
calendar years that a TIN you gave for the
same account is incorrect.
2. The incorrect TIN is still being used on the
account when the payer receives the second notice.
Underreported interest or dividends. If
you have been notified that you underreported
interest or dividends, you must request and receive a determination from the IRS to prevent
backup withholding from starting or to stop
backup withholding once it has begun. Your request must show that at least one of the following situations applies.
• No underreporting occurred.
• You have a bona fide dispute with the IRS
about whether an underreporting occurred.
• Backup withholding will cause or is causing an undue hardship and it is unlikely that
you will underreport interest and dividends
in the future.
• You have corrected the underreporting by
filing an original return if you didn’t previously file one or by filing an amended return and by paying all taxes, penalties, and
interest due for any underreported interest
or dividend payments.
If the IRS determines that backup withholding should stop, it will provide you with certification and will notify the payers who were sent notices earlier.
Penalties. There are civil and criminal penalties for giving false information to avoid backup
withholding. The civil penalty is $500. The criminal penalty, upon conviction, is a fine of up to
$1,000 or imprisonment of up to 1 year, or both.
Worksheets for Chapter 1
Use the following worksheets to figure your correct withholding and adjustments.
Use...
To...
Worksheet 1-1 and
Worksheet 1-2
Exemption From Withholding for
Persons/Dependents Age 65 or
Older or Blind
Figure your total expected income for 2026 to determine if you are exempt from withholding. Use Worksheet
1-1 if, in 2025, you had a right to a refund of all federal income tax withheld because of no tax liability. Use
Worksheet 1-2 if you are a dependent for 2026 and, for 2025, you had a refund of all federal income tax
withheld because of no tax liability.
Worksheet 1-3
Projected Tax for 2026
Project the taxable income you will have for 2026 and figure the amount of tax you will have to pay on that
income.
Worksheet 1-4
Tax Computation Worksheets for
2026
Figure the amount of tax on your projected taxable income.
Worksheet 1-5
Projected Withholding for 2026
Project the amount of federal income tax that you will have withheld in 2026, compare your projected
withholding with your projected tax, and determine whether the amount withheld each payday should be
adjusted.
Worksheet 1-6
Tax Credits for 2026 Form W-4 or
Form W-4P
Figure any extra amount to include in Step 3 of Form W-4 or Form W-4P to account for your projected tax
credits that are not otherwise taken into consideration.
Publication 505 (2026)
Chapter 1
Tax Withholding for 2026
13
Worksheet 1-1. Exemption From Withholding for Persons Age 65 or Older or Blind
Use this worksheet only if, for 2025, you had a right to a refund of all federal income tax withheld because you had no tax liability.
Caution: This worksheet does not apply if you can be claimed as a dependent. See Worksheet 1-2 instead.
1. Check the boxes below that apply to you.
65 or older
Blind
2. Check the boxes below that apply to your spouse’s standard deduction.*
65 or older
Blind
3. Add the number of boxes you checked in
1 and 2 above. Enter the result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
You can claim exemption from withholding if:
Your filing status is:
and your 2026
total income will
be no more than:
and the number on line 3 above is:
Single
1
2
$18,150
20,200
Head of
household
1
2
$26,200
28,250
Married filing
separately for
both 2025 and
2026
1
2
3
4
$17,750
19,400
21,050
22,700
Other married
status
1
2
3
4
$33,850**
35,500**
37,150**
38,800**
1
2
$33,850
35,300
** Include both spouses’ income whether you will file separately or jointly.
Qualifying
surviving spouse
You can’t claim exemption from withholding if your total income will be more than the amount shown for your filing status.
* You can check the appropriate boxes for your spouse if your filing status is Married filing jointly. You can check the appropriate boxes for your spouse if your filing
status is Married filing separately and your spouse had no income, isn’t filing a return, and can’t be claimed as a dependent on another person’s return.
Worksheet 1-2. Exemption From Withholding for Dependents Age 65 or Older or Blind
Use this worksheet only if, for 2026, you are a dependent and if, for 2025, you had a right to a refund of all federal income tax withheld because you
had no tax liability.
1. Enter your expected earned income plus $450 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.
2. Minimum amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.
3. Compare lines 1 and 2. Enter the larger amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.
4. Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.
5. Compare lines 3 and 4. Enter the smaller amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.
6. Enter the appropriate amount from the following table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.
Single
Either 65 or older or blind
Both 65 or older and blind
Married filing separately
Either 65 or older or blind
Both 65 or older and blind
$ 1,350
16,100
$2,050
4,100
1,650
3,300
7. Add lines 5 and 6. Enter the result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.
8. Enter your total expected income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.
You can claim exemption from withholding if line 7 is equal to or more than line 8. You can’t claim exemption from withholding if line 8 is more than
line 7.
14
Chapter 1
Tax Withholding for 2026
Publication 505 (2026)
Keep for Your Records
.
Worksheet 1-3. Projected Tax for 2026
Use this worksheet to figure your projected tax for 2026. Note: Enter combined amounts if Married filing jointly.
1. Enter amount of adjusted gross income (AGI) you expect in 2026. (To determine this, you may want to start with
the AGI on your last year’s return, and add or subtract your expected changes. Also, take into account items listed
under What’s New for 2026 and the Reminders section, earlier.)
Note: If self-employed, first complete Worksheet 2-3 to figure your expected deduction for self-employment tax.
Subtract the amount from Worksheet 2-3, line 11, to figure the line 1 entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. If you:
1.
• Don’t plan to itemize deductions on Schedule A (Form 1040), use Worksheet 2-4 to figure your expected
standard deduction plus up to $1,000 ($2,000 for married filing jointly) for charitable contributions made by cash
or check.
• Plan to itemize deductions, enter the amount of your estimated itemized deductions.
Caution: If you plan to itemize your deductions and claim a charitable contribution deduction, see Worksheet 2–
5 to figure the amount of your deduction.
Caution: If your expected taxable income will be more than $768,700 if married filing jointly or qualifying
widower; $640,600 if head of household or single; $384,350 if married filing separately, your itemized
deductions may be reduced. See Worksheet 2-6 to figure the amount of your deduction.
• Qualify for the deduction for qualified business income, enter the estimated amount of the deduction you are
allowed on your qualified business income from a qualified trade or business.
• Can take an additional deduction on Schedule 1-A, (Form 1040) enter the estimated amount you expect to enter
on Schedule 1-A (Form 1040), line 38. Add this amount to your expected standard deduction or estimated
itemized deductions and any expected deduction for qualified business income and enter the total here. . . . . .
3. Expected taxable income. Subtract line 2 from line 1. (If zero or less, enter -0- here and on line 4,
then go to line 5.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. If the amount on line 1:
2.
3.
• Doesn’t include a net capital gain or qualified dividends and you didn’t exclude foreign earned income or
exclude or deduct foreign housing in arriving at the amount on line 1, use Worksheet 1-4 to figure the tax to enter
here.
• Includes a net capital gain or qualified dividends, use Worksheet 2-7 to figure the tax to enter here.
• Was figured by excluding foreign earned income or excluding or deducting foreign housing, use
Worksheet 2-8 to figure the tax to enter here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Enter any expected additional taxes from an election to report your child’s interest and dividends, lump-sum
distributions (Form 4972), and alternative minimum tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. Add lines 4 and 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.
7. Enter the amount of any expected tax credits. See Table 1-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.
8. Subtract line 7 from line 6 (if zero or less, enter -0-) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.
4.
5.
9. Self-employment tax. Enter the amount from Worksheet 2-3, line 10. (If you expect to file jointly and both of you are
9.
self-employed, figure the self-employment tax for each of you separately and enter the total on line 9.) . . . . . . . .
10. Enter the total of any other expected taxes* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Projected tax for 2026. Add lines 8 through 10. Enter the total here and on Worksheet 1-5, line 1 . . . . . . . . . . . 11.
* Use the 2025 Instructions for Form 1040 to determine if you expect to owe, for 2026, any of the taxes that would have been entered on
your 2025 Schedule 2 (Form 1040), lines 7 through 17z and 19.
Publication 505 (2026)
Chapter 1
Tax Withholding for 2026
15
Keep for Your Records
Worksheet 1-4. Tax Computation Worksheets for 2026
Note: If you are figuring the tax on an amount from Worksheet 2-7 (line 1 or 14), or Worksheet 2-8 (line 2 or 3), enter the
amount from that worksheet in column (a) of the row that applies to that amount of income. Enter the result on the
appropriate line of the worksheet you are completing.
a. Single. Use this worksheet to figure the amount to enter on Worksheet 1-3, line 4, if you expect your filing status for 2026 to be Single.
Expected Taxable
Income
If Worksheet 1-3,
line 3* is —
Over
But not
over
(a)
Enter amount
from
Worksheet 1-3,
line 3*
(b)
Multiplication amount
(c)
Multiply
(a) by (b)
(d)
Subtraction
amount
(e)
Subtract (d) from (c). Enter the result
here and on Worksheet 1-3, line 4*
$0
$12,400
× 10% (0.10)
$0
12,400
50,400
× 12% (0.12)
248.00
50,400
105,700
× 22% (0.22)
5,288.00
105,700
201,775
× 24% (0.24)
7,402.00
201,775
256,225
× 32% (0.32)
23,544.00
256,225
640,600
× 35% (0.35)
31,230.75
640,600
-----
× 37% (0.37)
44,042.75
* If you are using Worksheet 2-7, for column (a) above, use the amount from line 1 or line 14 and enter the result (from column (e)) on line 37 or
line 39, as appropriate.
If you are using Worksheet 2-8, for column (a) above, use the amount from line 2 or line 3 and enter the result (from column (e)) on line 4 or line 5,
as appropriate.
b. Head of household. Use this worksheet to figure the amount to enter on Worksheet 1-3, line 4, if you expect your filing status for 2026 to
be Head of household.
Expected Taxable
Income
If Worksheet 1-3,
line 3* is —
Over
But not
over
(a)
Enter amount
from
Worksheet 1-3,
line 3*
(b)
Multiplication
amount
(c)
Multiply
(a) by (b)
(d)
Subtraction
amount
$0
$17,700
× 10% (0.10)
$0
17,700
67,450
× 12% (0.12)
354.00
67,450
105,700
× 22% (0.22)
7,099.00
105,700
201,750
× 24% (0.24)
9,213.00
201,750
256,200
× 32% (0.32)
25,353.00
256,200
640,600
× 35% (0.35)
33,039.00
640,600
-----
× 37% (0.37)
45,851.00
(e)
Subtract (d) from (c). Enter the result
here and on Worksheet 1-3, line 4*
* If you are using Worksheet 2-7, for column (a) above, use the amount from line 1 or line 14 and enter the result (from column (e)) on line 37
or line 39, as appropriate.
If you are using Worksheet 2-8, for column (a) above, use the amount from line 2 or line 3 and enter the result (from column (e)) on line 4 or
line 5, as appropriate.
16
Chapter 1
Tax Withholding for 2026
Publication 505 (2026)
Tax Computation Worksheet for 2026 (Continued)
c. Married filing jointly or Qualifying surviving spouse. Use this worksheet to figure the amount to enter on Worksheet 1-3, line 4, if you
expect your filing status for 2026 to be Married filing jointly or Qualifying surviving spouse.
Expected Taxable
Income
If Worksheet 1-3,
line 3* is —
Over
But not
over
(a)
Enter amount
from
Worksheet 1-3,
line 3*
(b)
Multiplication
amount
(c)
Multiply
(a) by (b)
(d)
Subtraction
amount
(e)
Subtract (d) from (c). Enter the result
here and on Worksheet 1-3, line 4*
$0
$24,800
× 10% (0.10)
$0
24,800
100,800
× 12% (0.12)
496.00
100,800
211,400
× 22% (0.22)
10,576.00
211,400
403,550
× 24% (0.24)
14,804.00
403,550
512,450
× 32% (0.32)
47,088.00
512,450
768,700
× 35% (0.35)
62,461.50
768,700
-----
× 37% (0.37)
77,835.50
* If you are using Worksheet 2-7, for column (a) above, use the amount from line 1 or line 14 and enter the result (from column (e)) on line 37
or line 39, as appropriate.
If you are using Worksheet 2-8, for column (a) above, use the amount from line 2 or line 3 and enter the result (from column (e)) on line 4 or
line 5, as appropriate.
d. Married filing separately. Use this worksheet to figure the amount to enter on Worksheet 1-3, line 4, if you expect your filing status for 2026 to
be Married filing separately.
Expected Taxable
Income
If Worksheet 1-3,
line 3* is —
Over
But not
over
(a)
(b)
Enter amount from Multiplication amount
Worksheet 1-3,
line 3*
(c)
Multiply
(a) by (b)
(d)
Subtraction
amount
$0
$12,400
× 10% (0.10)
$0
12,400
50,400
× 12% (0.12)
248.00
50,400
105,700
× 22% (0.22)
5,288.00
105,700
201,775
× 24% (0.24)
7,402.00
201,775
256,225
× 32% (0.32)
23,544.00
256,225
384,350
× 35% (0.35)
31,230.75
384,350
-----
× 37% (0.37)
38,917.75
(e)
Subtract (d) from (c). Enter the result
here and on Worksheet 1-3, line 4*
* If you are using Worksheet 2-7, for column (a) above, use the amount from line 1 or line 14 and enter the result (from column (e)) on line 37 or
line 39, as appropriate.
If you are using Worksheet 2-8, for column (a) above, use the amount from line 2 or line 3 and enter the result (from column (e)) on line 4 or line 5,
as appropriate.
Publication 505 (2026)
Chapter 1
Tax Withholding for 2026
17
Keep for Your Records
.
Worksheet 1-5. Projected Withholding for 2026
Use this worksheet to figure the amount of your projected withholding for 2026, compare it to your projected tax for 2026, and, if necessary, figure
any adjustment to the amount you have withheld each payday.
Note: If Married filing jointly, enter combined amounts.
1. Enter your projected tax for 2026 from Worksheet 1-3, line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Enter your total federal income tax withheld to date in 2026 from all sources of income. (For wages, you should be
able to find the withholding-to-date on your last pay slip or statement.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Enter the federal tax withholding you expect for the rest of 2026.
1.
2.
a. For each source of wages, multiply the amount of federal income tax now being withheld each payday by the
number of paydays remaining in the year and enter the combined amount for all jobs . . . . . . . . . . . . . . . . . . . . . 3a.
b. For all other sources of recurring taxable income, multiply the withholding amount by the remaining number of
times the income is expected. For example, if you have federal income tax withheld from your monthly pension and
you will receive nine more payments this year, multiply your monthly withholding amount by 9 . . . . . . . . . . . . . . . 3b.
4. Add lines 2, 3a, and 3b. This is your projected withholding for 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.
5. Compare the amounts on lines 1 and 4.
• If line 1 is more than line 4, subtract line 4 from line 1. You need to increase your withholding. Enter the result here
and go to line 6.
• If line 4 is more than line 1, subtract line 1 from line 4. You may want to decrease your withholding. Enter the
result here and go to line 6.
5.
6. Divide line 5 by the number of paydays (or other withholding events) remaining in 2026 and enter the result. This is the
additional amount you should use to either increase or decrease the amount you have withheld from each remaining
payday (or other withholding event). Follow the instructions for line 6 for your situation for completing a 2026 Form
W-4. The instructions are different if your withholding so far this year was based on a 2019 (or earlier) Form W-4 or a
2026 Form W-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
Instructions for line 6—If your
withholding to date was figured
based on a 2019 (or earlier) Form
W-4.
Use the following instructions to
increase your withholding.
Instructions for line 6—If your
withholding to date was figured
based on a 2019 (or earlier) Form
W-4.
Use the following instructions to
decrease your withholding.
Instructions for line 6—If your
withholding to date was figured
based on a 2026 Form W-4.
Use the following instructions to either
increase or decrease your
withholding.
How do you increase your withholding? Follow
these steps to increase your withholding by completing
a 2026 Form W-4.
How do you decrease your withholding? Follow
these steps to decrease your withholding by completing
a 2026 Form W-4.
How do you increase your withholding? Follow
these steps to increase your withholding by completing
a 2026 Form W-4.
Step 1:
If your filing status was "Single" or
"Married, but withhold at higher
Single rate," check "Single."
• If your filing status was "Married,"
check "Married filing jointly."
Note: Head of household filing status
was not a choice on the 2019 (or
earlier) Form(s) W-4.
Step 1:
If your filing status was "Single" or
"Married, but withhold at higher
Single rate," enter $10,600 (the
equivalent of 2 allowances) on
Step 4(a).
If your filing status was "Married,"
enter $15,900 (the equivalent of 3
allowances) on Step 4(a).
Step 3:
Step 4(a):
•
•
•
Step 4(b):
Step 4(c):
18
•
•
If there was an entry on line 5
(number of allowances), multiply
each claimed allowance by
$5,300 and enter the result on
Step 4(b).
If there is an amount on line 6,
add it to the amount on line 6 of
Worksheet 1-5 above and enter
the result on Step 4(c).
Step 4(a):
•
Multiply the amount on line 6 of
Worksheet 1-5 by the number of paydays
in 2026 and enter this amount on Step 3.
•
•
Step 4(b):
Step 4(c):
•
If your filing status was "Single" or
"Married, but withhold at higher
Single rate," check "Single."
• If your filing status was "Married,"
check "Married filing jointly."
Note: Head of household filing status was
not a choice on the 2019 (or earlier)
Form(s) W-4.
•
•
Chapter 1
•
How do you decrease your withholding?
•
If your filing status was "Single" or
"Married, but withhold at higher
Single rate," enter $10,600 (the
equivalent of 2 allowances) on Step
4(a).
If your filing status was "Married,"
enter $15,900 (the equivalent of 3
allowances) on Step 4(a).
If there was an entry on line 5
(number of allowances), multiply
each claimed allowance by $5,300
and enter the result on Step 4(b).
If there was an amount on line 6,
add it to the amount on Step 4(c).
Tax Withholding for 2026
Complete your new 2026 Form W-4
through Step 4(b) in the same way you
completed your previous Form W-4.
Add the amount, if any, on Step 4(c) of
your previous Form W-4 to the amount
on line 6 of Worksheet 1-5 above and
enter the result on Step 4(c) of your
new Form W-4.
•
Complete Steps 1, 2(c), 4(a), 4(b),
and 4(c) in the same way as you
completed your previous Form W-4.
Add the amount, if any, on Step 3 of
your previous Form W-4 to the product
of line 6 of Worksheet 1-5 multiplied
by the total number of paydays in 2026
and enter the result on Step 3 of your
new Form W-4.
If you make a mid-year change to your
withholding, you should complete and
CAUTION give to your employer a new Form W-4
in January. The later in the year you change
your Form W-4, the more important it is that you
submit a new form the following January.
!
Publication 505 (2026)
Worksheet 1-6. Tax Credits for 2026 Form W-4 or Form W-4P
Keep for Your Records
Use this worksheet to figure any extra amount to enter in Step 3 of Form W-4 or Form W-4P. For more information on these credits, see Tax
Credits, earlier.
Caution: The child tax credit and the credit for other dependents are already figured in Step 3 of Form W-4 or Form W-4P.
Enter the projected amount for each credit you expect to take (other than the child tax credit or credit for other
dependents).
1. Credit for the elderly or the disabled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.
2. Credit for child and dependent care expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.
3. Education credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.
4. Adoption credit (including the refundable portion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.
5. Foreign tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.
6. Retirement savings contributions credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.
7. Earned income credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.
8. Premium tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.
9. Other credits (see Table 1-2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.
10. Add lines 1 through 9. This is your total estimated tax credits. Include this amount in the total entered on Form W-4,
Step 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.
Publication 505 (2026)
Chapter 1
Tax Withholding for 2026
19
2.
Estimated Tax
for 2026
Introduction
Estimated tax is the method used to pay tax on
income that isn’t subject to withholding. This includes income from self-employment, interest,
dividends, rent, gains from the sale of assets,
prizes, and awards. You may also have to pay
estimated tax if the amount of income tax being
withheld from your salary, pension, or other income isn’t enough.
Estimated tax is used to pay both income
tax and self-employment tax, as well as other
taxes and amounts reported on your tax return.
If you don’t pay enough tax, either through withholding or estimated tax, or a combination of
both, you may have to pay a penalty. If you don’t
pay enough by the due date of each payment
period (see When To Pay Estimated Tax, later),
you may be charged a penalty even if you are
20
due a refund when you file your tax return. For
information on when the penalty applies, see
the Instructions for Form 2210.
It would be helpful for you to have a
TIP copy of your 2025 tax return and an es-
timate of your 2026 income nearby
while reading this chapter. Also, keep in mind
the items under What’s New for 2026 and the
Reminders section, earlier.
Topics
This chapter discusses:
• Who must pay estimated tax,
• How to figure estimated tax (including
illustrated examples),
• When to pay estimated tax,
• How to figure each payment, and
• How to pay estimated tax.
Useful Items
You may want to see:
Form (and Instructions)
1040-ES Estimated Tax for Individuals
1040-ES
See How To Get Tax Help at the end of this publication for information about how to get this
publication and form.
Chapter 2
Estimated Tax for 2026
Worksheets. You may need to use several of
the blank worksheets included in this chapter.
See Worksheets for Chapter 2 to locate what
you need.
Who Does Not Have To
Pay Estimated Tax
If you receive salaries and wages, you may be
able to avoid paying estimated tax by asking
your employer to take more tax out of your earnings. To do this, file a new Form W-4 with your
employer. See chapter 1.
Estimated tax not required. You don’t have to
pay estimated tax for 2026 if you meet all three
of the following conditions.
• You had no tax liability for 2025.
• You were a U.S. citizen or resident alien for
the whole year.
• Your 2025 tax year covered a 12-month period.
You had no tax liability for 2025 if your total
tax (defined later under Total tax for
2025—line 12b) was zero or you didn’t have to
file an income tax return.
Publication 505 (2026)
Figure 2-A: Do You Have To Pay Estimated Tax?
Figure 2-A. Do You Have To Pay Estimated Tax?
Start Here
1. Will you owe $1,000 or
more for 2026 after
subtracting income tax
withholding and refundable
credits* from your total
tax? (Don’t subtract any
estimated tax payments.)
Yes
2a. Will your income
withholding and refundable
credits* be at least 90%
(662⁄3 % for farming and fishing)
of the tax shown on your 2026
tax return?
No
2b. Will your income tax withholding
and refundable credits* be at
least 100%** of the tax shown
on your 2025 tax return?
No
Note: Your 2025 return must
have covered a 12-month
period.
Yes
No
Yes
You are NOT required to pay
estimated tax.
You MUST make estimated
tax payment(s) by the
required due date(s).
See When To Pay
Estimated Tax.
* Use the refundable credits shown on the 2026 Estimated Tax Worksheet, line 11b.
** 110% if less than two-thirds of your gross income for 2025 or 2026 is from farming or fishing and your 2025 adjusted gross income was
more than $150,000 ($75,000 if your filing status for 2026 is married filing a separate return).
Who Must Pay
Estimated Tax
If you owed additional tax for 2025, you may
have to pay estimated tax for 2026.
You can use the following general rule as a
guide during the year to see if you will have
enough withholding or should increase your
withholding or make estimated tax payments.
General Rule
In most cases, you must pay estimated tax for
2026 if both of the following apply.
1. You expect to owe at least $1,000 in tax for
2026 after subtracting your withholding
and tax credits.
2. You expect your withholding and tax credits to be less than the smaller of:
a. 90% of the tax to be shown on your
2026 tax return, or
b. 100% of the tax shown on your 2025
tax return. Your 2025 tax return must
cover all 12 months.
Note: The percentages in (2a) or (2b) just listed
may be different if you have income from farming or fishing or are a higher income taxpayer.
See Special Rules, later.
If the result from using the general rule
above suggests that you won’t have
CAUTION enough
withholding, complete the
2026 Estimated Tax Worksheet for a more accurate calculation.
!
Publication 505 (2026)
Figure 2-A takes you through the general
rule. You may find this helpful in determining if
you must pay estimated tax.
Making joint or separate estimated tax payments won’t affect your choice of filing a joint
tax return or separate returns for 2026.
If all your income will be subject to in-
2025 separate returns and 2026 joint return.
If you plan to file a joint return with your spouse
for 2026, but you filed separate returns for 2025,
your 2025 tax is the total of the tax shown on
your separate returns. You filed a separate return if you filed as Single, Head of household, or
Married filing separately.
TIP come tax withholding, you probably
don’t need to pay estimated tax.
Married Taxpayers
If you qualify to make joint estimated tax payments, apply the rules discussed here to your
joint estimated income.
You and your spouse can make joint estimated tax payments even if you are not living together.
However, you and your spouse can’t make
joint estimated tax payments if:
• You are legally separated under a decree
of divorce or separate maintenance,
• You and your spouse have different tax
years, or
• Either spouse is a nonresident alien (unless that spouse elected to be treated as a
resident alien for tax purposes). See
Choosing Resident Alien Status in Pub.
519.
Note: Individuals who are in registered domestic partnerships, civil unions, or other similar formal relationships that are not marriages
under state law can’t make joint estimated tax
payments. These individuals can take credit
only for the estimated tax payments that he or
she made.
If you and your spouse can’t make joint estimated tax payments, apply these rules to your
separate estimated income.
Chapter 2
Estimated Tax for 2026
2025 joint return and 2026 separate returns.
If you plan to file a separate return for 2026 but
you filed a joint return for 2025, your 2025 tax is
your share of the tax on the joint return. You file
a separate return if you file as Single, Head of
household, or Married filing separately.
To figure your share of the tax on a joint return, first figure the tax both you and your
spouse would have paid had you filed separate
returns for 2025 using the same filing status for
2026. Then, multiply the tax on the joint return
by the following fraction.
The tax you would have paid
had you filed a separate
return
The total tax you and your
spouse would have paid
had you filed separate
returns
Special Rules
There are special rules for those who have income from farming and fishing, for certain
household employers, and for certain higher income taxpayers.
21
Farming and Fishing
If at least two-thirds of your gross income for
2025 or 2026 is from farming or fishing, substitute 662/3% for 90% in (2a) under General Rule,
earlier.
Gross income. Your gross income is all income you receive in the form of money, goods,
property, and services that isn’t exempt from
tax. To determine whether two-thirds of your
gross income for 2025 was from farming or fishing, use as your gross income the total of the income (not loss) amounts.
Joint returns. On a joint return, you must add
your spouse’s gross income to your gross income to determine if at least two-thirds of your
total gross income is from farming or fishing.
Gross income from farming. This is income
from cultivating the soil or raising agricultural
commodities. It includes the following amounts.
• Income from operating a stock, dairy, poultry, bee, fruit, or truck farm.
• Income from a plantation, ranch, nursery,
range, orchard, or oyster bed.
• Crop shares for the use of your land.
• Gains from sales of draft, breeding, dairy,
or sporting livestock.
For 2025, gross income from farming is the
total of the following amounts.
• Schedule F (Form 1040), Profit or Loss
From Farming, line 9.
• Form 4835, Farm Rental Income and Expenses, line 7.
• Your share of the gross farming income
from a partnership, S corporation, estate or
trust from Schedule K-1 (Form 1065),
Schedule K-1 (Form 1120-S), or Schedule K-1 (Form 1041).
• Your gains from sales of draft, breeding,
dairy, or sporting livestock shown on Form
4797, Sales of Business Property.
Wages you receive as a farm employee and
wages you receive from a farm corporation are
not gross income from farming.
Gross income from fishing. This is income
from catching, taking, harvesting, cultivating, or
farming any kind of fish, shellfish (for example,
clams and mussels), crustaceans (for example,
lobsters, crabs, and shrimp), sponges, seaweeds, or other aquatic forms of animal and
vegetable life.
Gross income from fishing includes the following amounts.
• Schedule C (Form 1040), Profit or Loss
From Business, line 7.
• Income for services as an officer or crew
member of a vessel while the vessel is engaged in fishing.
• Your share of the gross fishing income
from a partnership, S corporation, estate or
trust from Schedule K-1 (Form 1065),
Schedule K-1 (Form 1120S), or Schedule K-1 (Form 1041).
• Certain taxable interest and punitive damage awards received in connection with the
Exxon Valdez litigation.
• Income for services normally performed in
connection with fishing.
22
Services normally performed in connection with
fishing include:
• Shore service as an officer or crew member of a vessel engaged in fishing; and
• Services that are necessary for the immediate preservation of the catch, such as
cleaning, icing, and packing the catch.
When figuring your 2026 estimated tax, it
may be helpful to use your income, deductions,
and credits for 2025 as a starting point. Use
your 2025 federal tax return as a guide. You can
use Form 1040-ES to figure your estimated tax.
Nonresident aliens use Form 1040-ES (NR) to
figure estimated tax.
Household Employers
You must make adjustments both for
changes in your own situation and for recent
changes in the tax law. Some of these changes
are discussed earlier under What’s New for
2026 and the Reminders section. For information about these and other changes in the law,
visit the IRS website at IRS.gov.
When estimating the tax on your 2026 tax return, include your household employment taxes
if either of the following applies.
• You will have federal income tax withheld
from wages, pensions, annuities, gambling
winnings, or other income.
• You would be required to make estimated
tax payments to avoid a penalty even if you
didn’t include household employment
taxes when figuring your estimated tax.
The instructions for Form 1040-ES include a
worksheet to help you figure your estimated tax.
Keep the worksheet for your records.
Higher Income Taxpayers
2026 Estimated Tax
Worksheet
If your AGI for 2025 was more than $150,000
($75,000 if your filing status for 2026 is Married
filing a separate return), substitute 110% for
100% in (2b) under General Rule, earlier.
If you file Form 1040-SS use the Estimated Tax Worksheet for Filers of Form
CAUTION 1040-SS, in Form 1040-ES to figure
your estimated tax.
For 2025, AGI is the amount shown on Form
1040 or 1040-SR, line 11b.
Use Worksheet 2-1 to help guide you
through the information about completing the
2026 Estimated Tax Worksheet. You can also
find a copy of the worksheet in the instructions
for Form 1040-ES.
Note: If at least two-thirds of your gross income for 2025 or 2026 is from farming or fishing, this rule doesn’t apply.
Expected AGI—Line 1
Aliens
Resident and nonresident aliens may also have
to pay estimated tax. Resident aliens should follow the rules in this publication, unless noted
otherwise. Nonresident aliens should get Form
1040-ES (NR), U.S. Estimated Tax for Nonresident Alien Individuals.
You are an alien if you are not a citizen or national of the United States. You are a resident
alien if you either have a green card or meet the
substantial presence test.
For more information about withholding, the
substantial presence test, and Form 1040-ES
(NR), see Pub. 519.
Estates and Trusts
Estates and trusts must also pay estimated tax.
However, estates (and certain grantor trusts
that receive the residue of the decedent’s estate
under the decedent’s will) are exempt from paying estimated tax for the first 2 years after the
decedent’s death.
Estates and trusts must use Form 1041-ES,
Estimated Income Tax for Estates and Trusts, to
figure and pay estimated tax.
How To Figure
Estimated Tax
To figure your estimated tax, you must figure
your expected AGI, taxable income, taxes, deductions, and credits for the year.
Chapter 2
!
Estimated Tax for 2026
Your expected AGI for 2026 (line 1) is your expected total income minus your expected adjustments to income.
Total income. Include in your total income all
the income you expect to receive during the
year, even income that is subject to withholding.
However, don’t include income that is tax exempt.
Total income includes all income and loss
for 2026 that, if you had received it in 2025,
would have been included on your 2025 tax return in the total on line 9 of Form 1040 or
1040-SR.
Social security and railroad retirement benefits. If you expect to receive
social security or tier 1 railroad retirement benefits during 2026, use Worksheet 2-2
to figure the amount of expected taxable benefits you should include on line 1.
Adjustments to income. Be sure to subtract
from your expected total income all of the adjustments you expect to take on your 2026 tax
return.
Self-employed. If you expect to have
income from self-employment, use
Worksheet 2-3 to figure your expected
self-employment tax and your allowable deduction for self-employment tax. Include the
amount from Worksheet 2-3 in your expected
adjustments to income. If you file a joint return
and both you and your spouse have net earnings from self-employment, each of you must
complete a separate worksheet.
Publication 505 (2026)
Expected Taxable Income—
Line 2
Reduce your expected AGI for 2026 (line 1) by
either your expected itemized deductions or
your standard deduction.
Itemized deductions—line 2a. If you expect
to claim itemized deductions on your 2026 tax
return, enter the estimated amount on line 2a.
Itemized deductions are the deductions that
can be claimed on Schedule A (Form 1040).
For 2026, if you plan to take an itemized deduction for a charitable contriCAUTION bution, you can only deduct charitable
contributions that are more than 0.5% of your
AGI. Use Worksheet 2-5 to figure your expected
charitable contribution deduction. Also, see
Worksheet 2-6.
!
few of these steps. However, you should check
every step to be sure you don’t overlook anything.
• Credit for previously owned clean vehicles.
• Credit for commercial clean vehicles.
• Credit for energy efficient home improve-
Step 1. Figure your expected income tax
(line 4). Generally, you will use the 2026 Tax
Rate Schedules to figure your expected income
tax.
However, see below for situations where you
must use a different method to figure your estimated tax.
• Credit for residential clean energy systems.
Tax on child’s investment income. You
must use a special method to figure tax on the
income of the following children who have more
than $2,700 of investment income.
1. Children under age 18 at the end of 2026.
2. The following children if their earned income isn’t more than half their support.
a. Children age 18 at the end of 2026.
For 2026, your total itemized deductions may be reduced if your taxable inCAUTION come is more than the amount shown
next for your filing status.
$768,700
$640,600
$384,350
If you expect your taxable income to be more
than this amount, use Worksheet 2-6. Also, see
Worksheet 2-5 if you plan to take an itemized
deduction for a charitable contribution.
Standard deduction—line 2a. If you expect
to claim the standard deduction on your 2026
tax return, enter the amount on line 2a. Use
Worksheet 2-4 to figure your standard deduction.
Charitable contribution deduction for
non-itemizers. If you expect to take the standard deduction on your 2026 tax return, you (or
you and your spouse if filing jointly) may be able
to take a charitable contribution deduction of up
to $1,000 ($2,000 if married filing jointly) for
contributions made by cash or check. Add this
amount to the standard deduction amount entered on line 2a.
Generally, this includes contributions made
to organizations that are religious, charitable,
educational, scientific, or literary in purpose.
See Pub. 526 for more information on the types
of organizations that qualify.
No standard deduction. The standard deduction for some individuals is zero. Your standard deduction will be zero if you:
• File a separate return and your spouse
itemizes deductions,
• Are a dual-status alien, or
• File a return for a period of less than 12
months because you change your accounting period.
Expected Taxes and Credits—
Lines 4–11c
After you have figured your expected taxable income (line 3), follow the steps next to figure
your expected taxes, credits, and total tax for
2026. Most people will have entries for only a
Publication 505 (2026)
The credit for alternative refueling property expires in 2026 for property acquired and placed
in service after June 30, 2026.
Step 4. Add your expected self-employment
tax (line 9). You should already have figured
your self-employment tax (see Self-employed
under Expected AGI—Line 1, earlier).
Step 5. Add your expected other taxes
(line 10).
Other taxes include the following. The total
of these taxes are entered on line 10.
1. Additional tax on early distributions from:
b. Children who are full-time students at
least age 19 but under age 24 at the
end of 2026.
a. An IRA or other qualified retirement
plan,
Tax on net capital gain. The regular income tax rates for individuals don’t apply to a
net capital gain. Instead, your net capital gain is
taxed at a lower maximum rate.
The term “net capital gain” means the
amount by which your net long-term capital gain
for the year is more than your net short-term
capital loss.
c. A modified endowment contract entered into after June 20, 1988.
!
Married filing jointly or Qualifying
surviving spouse . . . . . . . . . . . . .
Head of household or Single . . . . . . .
Married filing separately . . . . . . . . .
ments.
b. A tax-sheltered annuity, or
2. Household employment taxes if:
a. You will have federal income tax withheld from wages, pensions, annuities,
gambling winnings, or other income;
or
Tax on capital gain and qualified
dividends. If the amount on line 1 includes a net capital gain or qualified
dividends, use Worksheet 2-7 to figure your tax.
Note: The tax rate on your capital gains and
dividends will depend on your income.
b. You would be required to make estimated tax payments even if you didn’t
include household employment taxes
when figuring your estimated tax.
3. Amounts entered on Schedule 2 (Form
1040), lines 14 through 17z and 19. But
don’t include the following.
Tax if excluding foreign earned income or excluding or deducting foreign housing. If you expect to claim
the foreign earned income exclusion or the
housing exclusion or deduction on Form 2555,
use Worksheet 2-8 to figure your estimated tax.
a. Line 17b, recapture of a federal mortgage subsidy;
b. Line 17k, tax on excess golden parachute payments;
c. Line 17m, excise tax on insider stock
compensation from an expatriated
corporation; or
Step 2. Total your expected taxes (line 6). Include on line 6 the sum of the following.
d. Line 17n, look-back interest due under section 167(g) or 460(b) of the Internal Revenue Code.
1. Your tax on line 6.
2. Your expected alternative minimum tax
(AMT) from Form 6251.
3. Your expected additional taxes from Form
8814, Parents’ Election To Report Child’s
Interest and Dividends, and Form 4972,
Tax on Lump-Sum Distributions.
4. Any recapture of education credits.
Step 3. Subtract your expected credits (line 7).
If you are using your 2025 return as a guide and
filed Form 1040 or 1040-SR, your total credits
for 2025 were shown on line 21.
If your credits on line 7 are more than your
taxes on line 6, enter -0- on line 8 and go to
Step 4.
!
CAUTION
When figuring your credits, keep in
mind the following credits can’t be
claimed in 2026.
• Credit for new clean vehicles.
Chapter 2
Estimated Tax for 2026
4. Additional Medicare Tax. A 0.9% Additional Medicare Tax applies to your combined Medicare wages and self-employment income and/or your RRTA
compensation that exceeds the amount
listed in the following chart, based on your
filing status.
Filing Status
Threshold Amount
Married filing jointly
$250,000
Married filing separately
$125,000
Single
$200,000
Head of household
$200,000
Qualifying surviving spouse
$200,000
Medicare wages and self-employment
income are combined to determine if your
income exceeds the threshold. A
23
self-employment loss should not be considered for purposes of this tax. RRTA
compensation should be separately compared to the threshold. Your employer is
responsible for withholding the 0.9% Additional Medicare Tax on Medicare wages or
RRTA compensation it pays to you in excess of $200,000 in 2026. You should consider this withholding, if applicable, in determining whether you need to make an
estimated payment.
5. Net Investment Income Tax (NIIT). The
NIIT is 3.8% of the lesser of your net investment income or the excess of your
MAGI over the amount listed in the following chart, based on your filing status.
Filing Status
Threshold Amount
Married filing jointly
$250,000
Married filing separately
$125,000
Single
$200,000
Head of household
$200,000
Qualifying surviving spouse
$250,000
Step 6. Subtract your refundable credits
(line 11c). These include the earned income
credit, additional child tax credit, fuel tax credit,
net premium tax credit, refundable American
opportunity credit, refundable adoption credit,
and section 1341 credit.
To figure your expected fuel tax credit, don’t
include fuel tax for the first 3 quarters of the
year that you expect to have refunded to you.
The result of Steps 1 through 6 is your total
estimated tax for 2026 (line 11c).
Required Annual Payment—
Line 12c
On lines 12a through 12c, figure the total
amount you must pay for 2026, through withholding and estimated tax payments, to avoid
paying a penalty.
General rule. The total amount you must pay
is the smaller of:
1. 90% of your total expected tax for 2026, or
2. 100% of the total tax shown on your 2025
return. Your 2025 tax return must cover all
12 months.
Special rules. There are special rules for
those who have income from farming and fishing, for certain higher income taxpayers, and for
those who make a valid section 1062 election..
Higher income taxpayers. If your AGI for
2025 was more than $150,000 ($75,000 if your
filing status for 2026 is Married filing separately), substitute 110% for 100% in (2) above. If
at least two-thirds of your gross income for 2025
or 2026 is from farming or fishing, this rule
doesn’t apply.
For 2025, AGI is the amount shown on Form
1040 or 1040-SR, line 11b.
Example. Your total tax on the 2025 return
was $42,581, and the expected tax for 2026 is
$71,253. Your 2025 AGI was $180,000. Because you had more than $150,000 of AGI in
24
2025, you figure the required annual payment
as follows. You determine that 90% of the expected tax for 2026 is $64,128 (90% (0.90) ×
$71,253). Next, you determine that 110% of the
tax shown on the 2025 return is $46,839 (110%
(1.10) x $42,581). Finally, you determine that
the required annual payment is $46,839, the
smaller of the two.
Farming and fishing. If at least two-thirds
of your gross income for 2025 or 2026 is from
farming or fishing, your required annual payment is the smaller of:
1. 662/3% (0.6667) of your total tax for 2026,
or
2. 100% of the total tax shown on your 2025
return. (Your 2025 tax return must cover all
12 months.)
For definitions of “gross income from farming” and “gross income from fishing,” see Farming and Fishing, earlier, under Special Rules.
Valid section 1062 election. If you sold or
exchanged qualified farmland to a qualified
farmer, and you properly made the election under section 1062 to pay the net income tax liability on the sale or exchange in four equal installments,
a
limited
waiver
of
the
underpayment penalty will apply to the deferred
amount of the applicable net income tax liability.
For the year of the sale, you may exclude
75% of the net applicable income tax liability
when you are figuring your required annual payment for the year. When figuring your required
annual payment, you must include the portion of
the applicable net income tax liability (25%) that
will be paid when you file your Form 1040 or
1040-SR for the year. For more information, see
Notice 2026-3.
Total tax for 2025—line 12b. Your 2025 total
tax is the amount on Form 1040 or 1040–SR,
line 24 reduced by the following.
1. Unreported social security and Medicare
tax or RRTA tax from Forms 4137 or 8919
included on Schedule 2 (Form 1040), lines
5 and 6.
2. Amounts from Form 5329, Parts III through
IX only.
3. The following amounts from Schedule 2
(Form 1040).
a. Excise tax on excess golden parachute payments (Schedule 2,
line 17k).
b. Excise tax on insider stock compensation from an expatriated corporation
(Schedule 2, line 17m).
c. Look-back interest due under section
167(g) (Schedule 2, line 17n).
d. Look-back interest due under section
460(b) (Schedule 2, line 17n).
30; and Schedule 3 (Form 1040), lines 9
and 12.
Total Estimated Tax Payments
Needed—Line 14a
Use lines 13 and 14a to figure the total estimated tax you may be required to pay for 2026.
Subtract your expected withholding from your
required annual payment (line 12c). You must
usually pay this difference in four equal installments. See When To Pay Estimated Tax and
How To Figure Each Payment, later.
You don’t have to pay estimated tax if:
• Line 12c minus line 13 is zero or less, or
• Line 11c minus line 13 is less than $1,000.
Withholding—line 13. Your expected withholding for 2026 (line 13) includes the income
tax you expect to be withheld from all sources
(wages, pensions and annuities, etc.). It includes excess social security and tier 1 railroad
retirement tax you expect to be withheld from
your wages and compensation. For this purpose, you will have excess social security or tier
1 railroad retirement tax withholding for 2026
only if your wages and compensation from two
or more employers are more than $184,500.
It also includes Additional Medicare Tax you
expect to be withheld from your wages or compensation. Your employer is responsible for
withholding the 0.9% Additional Medicare Tax
on Medicare wages or RRTA compensation it
pays to you in excess of $200,000.
When To Pay
Estimated Tax
For estimated tax purposes, the year is divided
into four payment periods. Each period has a
specific payment due date. If you don’t pay
enough tax by the due date of each of the payment periods, you may be charged a penalty
even if you are due a refund when you file your
income tax return.
If a payment is mailed, the date of the U.S.
postmark is considered the date of payment.
The general payment periods and due dates for
estimated tax payments are shown next. For exceptions to the dates listed, see Saturday, Sunday, holiday rule.
Recent clarification to the U.S. Postal
Service (USPS) postmark rules makes
CAUTION clear that for purposes of the “timely
mailing treated as timely filing/paying” rule for
tax returns and payments, the postmarked date
of a return/payment is the date the return is processed at a facility. This date may or may not be
the date you drop your payment off in the mailbox or at a USPS location.
!
e. Recapture of federal mortgage subsidy (Schedule 2, line 17b).
f. Uncollected social security and Medicare tax or RRTA tax on tips or
group-term life insurance (Schedule 2,
line 13).
4. Any refundable credit amounts on Form
1040 or 1040-SR, lines 27a, 28, 29, and
Chapter 2
Estimated Tax for 2026
Publication 505 (2026)
For the period:
General due
date:
Tax year 2026
due date:
Jan. 11
– March 31 . . . . April 15
April 15, 2026
April 1
– May 31 . . . . . . June 15
June 15, 2026
June 1
– Aug. 31 . . . . . Sept. 15
Sept. 15, 2026
Sept. 1
– Dec. 31 . . . . . Jan. 15, next year2 Jan. 15, 2027
If your tax year does not begin on January 1, see
Fiscal-year taxpayers, later.
2
See January payment, later.
1
Saturday, Sunday, holiday rule. If the due
date for an estimated tax payment falls on a
Saturday, Sunday, or legal holiday, the payment
will be on time if you make it on the next day
that isn’t a Saturday, Sunday, or a holiday. See
Pub. 509 for a list of all legal holidays.
January payment. If you file your 2026 Form
1040 or 1040-SR by January 31, 2027, and pay
the rest of the tax you owe, you don’t need to
make the payment due on January 15, 2027.
Example. You do not pay any estimated tax
for 2026. You file the 2026 income tax return
and pay the balance due shown on the return
on January 26, 2027.
Your estimated tax for the fourth payment
period is considered to have been paid on time.
However, you may owe a penalty for not making
the first three estimated tax payments, if required. Any penalty for not making those payments will be figured up to January 26, 2027.
Fiscal-year taxpayers. If your tax year does
not start on January 1, your payment due dates
are:
1. The 15th day of the 4th month of your fiscal year,
If you choose to pay in installments, make
your first payment by the due date for the first
payment period. Make your remaining installment payments by the due dates for the later
periods.
To avoid any estimated tax penalties, all installments must be paid by their due date and
for the required amount.
No income subject to estimated tax during
first period. If you don’t have income subject
to estimated tax until a later payment period,
you must make your first payment by the due
date for that period. You can pay your entire estimated tax by the due date for that period or
you can pay it in installments by the due date for
that period and the due dates for the remaining
periods. Table 2-1 shows the general due dates
for making installment payments when the due
date does not fall on a Saturday, Sunday, or holiday.
Table 2-1. General Due Dates for
Estimated Tax
Installment Payments
If you first have
income on which
you must pay
estimated tax:
Make a
payment
by:*
Make later
installments
by:*
Before April 1
April 15
June 15
Sept. 15
Jan. 15 next year
April 1–May 31
June 15
Sept. 15
Jan. 15 next year
June 1–Aug. 31
Sept. 15
Jan. 15 next year
After Aug. 31
Jan. 15
next year
(None)
* See January payment and Saturday, Sunday,
holiday rule, earlier.
2. The 15th day of the 6th month of your fiscal year,
How much to pay to avoid penalty. To determine how much you should pay by each payment due date, see How To Figure Each Payment, later.
3. The 15th day of the 9th month of your fiscal year, and
Farming and Fishing
4. The 15th day of the 1st month after the
end of your fiscal year.
You don’t have to make the last payment listed above if you file your income tax return by
the last day of the first month after the end of
your fiscal year and pay all the tax you owe with
your return.
When To Start
You don’t have to make estimated tax payments
until you have income on which you will owe income tax. If you have income subject to estimated tax during the first payment period, you
must make your first payment by the due date
for the first payment period.
You have several options when paying estimated taxes. You can:
• Apply an overpayment from the previous
tax year,
• Pay all your estimated tax by the due date
of your first payment, or
• Pay it in installments.
Publication 505 (2026)
If at least two-thirds of your gross income for
2025 or 2026 is from farming or fishing, you
have only one payment due date for your 2026
estimated tax: January 15, 2027. The due dates
for the first three payment periods, discussed
under When To Pay Estimated Tax, earlier, don’t
apply to you.
If you file your 2026 Form 1040 or 1040-SR
by March 1, 2027, and pay all the tax you owe
at that time, you don’t need to make an estimated tax payment.
Fiscal year. If at least two-thirds of your gross
income for 2025 or 2026 is from farming or fishing but your tax year does not start on January
1, you can either:
• Pay all your estimated tax by the 15th day
after the end of your tax year, or
• File your return and pay all the tax you owe
by the 1st day of the 3rd month after the
end of your tax year.
Chapter 2
Estimated Tax for 2026
How To Figure
Each Payment
After you have figured your total estimated tax,
figure how much you must pay by the due date
of each payment period. You should pay
enough by each due date to avoid a penalty for
that period. If you don’t pay enough during any
payment period, you may be charged a penalty
even if you are due a refund when you file your
tax return. The penalty is discussed in the Instructions for Form 2210.
Regular Installment Method
If your first estimated tax payment is due April
15, 2026, you can figure your required payment
for each period by dividing your annual estimated tax due (line 14a of the 2026 Estimated Tax
Worksheet (Worksheet 2-1)) by 4. Enter this
amount on line 15. However, use this method
only if your income is basically the same
throughout the year.
Change in estimated tax. After you make an
estimated tax payment, changes in your income, adjustments, deductions, or credits may
make it necessary for you to refigure your estimated tax. Pay the unpaid balance of your
amended estimated tax by the next payment
due date after the change or in installments by
that date and the due dates for the remaining
payment periods.
If you don’t receive your income evenly
throughout the year, your required estimated tax
payments may not be the same for each period.
See Annualized Income Installment Method,
later.
Amended estimated tax. If you refigure your estimated tax during the year
or if your first estimated tax payment is
due after April 15, 2026, figure your required
payment for each remaining payment period using Worksheet 2-12.
Example. Early in 2026, you figure estimated tax due of $1,800. You make estimated tax
payments on April 15 and June 15 of $450 each
($1,800 ÷ 4).
On July 10, you sell investment property at a
gain. Your refigured estimated tax is $4,100.
The required estimated tax payment for the third
payment period is $2,175.
If your estimated tax does not change again,
the required estimated tax payment for the
fourth payment period will be $1,025.
Underpayment penalty. The penalty is figured separately for each payment period. If you
figure your payments using the regular installment method and later refigure your payments
because of an increase in income, you may be
charged a penalty for underpayment of estimated tax for the period(s) before you changed
your payments. To see how you may be able to
avoid or reduce this penalty, see Schedule AI—Annualized Income Installment Method
in the Instructions for Form 2210.
25
Worksheet 2-12. Amended Estimated Tax Worksheet
Keep for Your Records
1. Amended total estimated tax due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Multiply line 1 by:
50% (0.50) if next payment is due June 15, 2026
75% (0.75) if next payment is due September 15, 2026
100% (1.00) if next payment is due January 15, 2027 . . . . . . . . . . . . . . . . .
2.
3. Estimated tax payments for all previous periods
......................
3.
4. Next required payment: Subtract line 3 from line 2 and enter the result (but not
less than zero) here and on your payment voucher for your next required
payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.
1.
Note: If the payment on line 4 is due January 15, 2027, stop here. Otherwise,
go to line 5.
26
5. Add lines 3 and 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.
6. Subtract line 5 from line 1 and enter the result (but not less than zero)
..............................
6.
7. Each following required payment: If the payment on line 4 is due June 15, 2026, enter one-half of the
amount on line 6 here and on the payment vouchers for your payments due September 15, 2026, and January
15, 2027. If the amount on line 4 is due September 15, 2026, enter the amount from line 6 here and on the
payment voucher for your payment due January 15, 2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.
Chapter 2
Estimated Tax for 2026
Publication 505 (2026)
Annualized Income
Installment Method
If you don’t receive your income evenly throughout the year (for example, your income from a
repair shop you operate is much larger in the
summer than it is during the rest of the year),
your required estimated tax payment for one or
more periods may be less than the amount figured using the regular installment method.
The annualized income installment method
annualizes your tax at the end of each period
based on a reasonable estimate of your income, deductions, and other items relating to
events that occurred from the beginning of the
tax year through the end of the period. To see
whether you can pay less for any period, complete the 2026 Annualized Estimated Tax Worksheet (Worksheet 2-9).
nualized Estimated Tax Worksheet (Worksheet
2-9)).
For 2026, if you plan to take an itemized deduction for a charitable contriCAUTION bution, you can only deduct charitable
contributions that are more than 0.5% of your
AGI. Use Worksheet 2-5 to figure your expected
charitable contribution deduction. Also, see
Worksheet 2-6.
!
For 2026, your total itemized deductions may be reduced if your taxable inCAUTION come is more than the amount shown
next for your filing status.
!
Married filing jointly or Qualifying surviving
spouse . . . . . . . . . . . . . . . . . . . . $768,700
Head of household or Single . . . . . . . . . $640,600
Married filing separately . . . . . . . . . . . $384,350
You first must complete the 2026 Estimated Tax Worksheet (Worksheet 2-1)
through line 14b.
If you expect your taxable income to be than
this amount, use Worksheet 2-6. Also, see
Worksheet 2-5 if you plan to take an itemized
deduction for a charitable contribution.
Use the result you figure on line 32 of Worksheet 2-9 to make your estimated tax payments
and complete your payment vouchers.
Line 7. If you won’t itemize your deductions,
use Worksheet 2-4 to figure your standard deduction.
Note: If you use the annualized income installment method to figure your estimated tax
payments, you must file Form 2210 with your
2026 tax return. See Schedule AI—Annualized
Income Installment Method in the Instructions
for Form 2210 for more information.
Line 12. Generally, you will use the Tax Rate
Schedules to figure the tax on your annualized
income. However, see below for situations
where you must use a different method to figure
your estimated tax.
!
CAUTION
Instructions for the 2026
Annualized Estimated Tax
Worksheet (Worksheet 2-9)
TIP
Use Worksheet 2-9 to help you follow
these instructions.
The purpose of this worksheet is to determine your estimated tax liability as your income
accumulates throughout the year, rather than dividing your entire year’s estimated tax liability by
4 as if your income was earned equally throughout the year. The top of the worksheet shows
the dates for each payment period. The periods
build; that is, each period includes all previous
periods. After the end of each payment period,
complete the corresponding worksheet column
to figure the payment due for that period.
Line 1. Enter your AGI for the period. This is
your gross income for the period, including your
share of partnership or S corporation income or
loss, minus your adjustments to income for that
period. See Expected AGI—Line 1, earlier.
Self-employment income. If you had
self-employment income, first complete Section B of this worksheet. Use the amounts on
line 41 when figuring your expected AGI to enter
in each column of Section A, line 1.
Line 4. Be sure to consider deduction limits figured on Schedule A (Form 1040), such as the
$40,400 ($20,200 for married individuals filing
separately) limit on state and local taxes. Figure
your deduction limits using your expected AGI
in the corresponding column of line 1 (2026 AnPublication 505 (2026)
Line 13. Add the tax from Forms 8814, 4972,
and 6251 for the period. Also, include any recapture of an education credit for each period.
You may owe this tax if you claimed an education credit in an earlier year and you received either tax-free educational assistance or a refund
of qualifying expenses for the same student after filing your 2025 return.
Use the 2025 forms or worksheets to see if
you will owe any of the taxes just discussed.
Figure the tax based on your income and deductions during the period shown in the column
headings. Multiply this amount by the annualization amounts shown for each column on
line 2 of the 2026 Annualized Estimated Tax
Worksheet (Worksheet 2-9). Enter the result on
line 13 of this worksheet.
Line 15. Include all the nonrefundable credits
you expect to claim because of events that will
occur during the period.
Note: When figuring your credits for each
period, annualize any item of income or deduction to figure each credit. For example, if you
need to use your AGI to figure a credit, use
line 3 of Worksheet 2-9 to figure the credit for
each column.
Line 18. Add your expected other taxes.
Other taxes include the following.
1. Additional tax on early distributions from:
a. An IRA or other qualified retirement
plan,
Tax on child’s investment income. You
must use a special method to figure tax on the
income of the following children who have more
than $2,700 of investment income.
1. Children under age 18 at the end of 2026.
b. A tax-sheltered annuity, or
c. A modified endowment contract entered into after June 20, 1988.
2. Household employment taxes if:
a. You will have federal income tax withheld from wages, pensions, annuities,
gambling winnings, or other income;
or
2. The following children if their earned income isn’t more than half their support.
a. Children age 18 at the end of 2026.
b. Children who are full-time students at
least age 19 but under age 24 at the
end of 2026.
Tax on net capital gain. The regular income tax rates for individuals don’t apply to a
net capital gain. Instead, your net capital gain is
taxed at a lower maximum rate.
The term “net capital gain” means the
amount by which your net long-term capital gain
for the year is more than your net short-term
capital loss.
Tax on qualified dividends and capital
gains. For 2026, your capital gain and dividends rate will depend on your income.
Tax on capital gain or qualified dividends. If the amount on line 1 includes
a net capital gain or qualified dividends, use Worksheet 2-10 to figure the
amount to enter on line 12.
Tax if excluding foreign earned income or excluding or deducting foreign housing. If you expect to claim
the foreign earned income exclusion or the
housing exclusion or deduction on Form 2555,
use Worksheet 2-11 to figure the amount to enter on line 12.
Chapter 2
Estimated Tax for 2026
b. You would be required to make estimated tax payments even if you didn’t
include household employment taxes
when figuring your estimated tax.
3. Amounts on Schedule 2 (Form 1040),
lines 14 through 16, and 17a, 17c through
17j, 17l, and 17o through 17z and 19.
4. Additional Medicare Tax. A 0.9% Additional Medicare Tax applies to your combined Medicare wages and self-employment income and/or your RRTA
compensation that exceeds the amount
listed in the following chart, based on your
filing status.
Filing Status
Threshold Amount
Married filing jointly
$250,000
Married filing separately
$125,000
Single
$200,000
Head of household
$200,000
Qualifying surviving spouse
$200,000
Medicare wages and self-employment
income are combined to determine if your
income exceeds the threshold. A self-employment loss should not be considered
27
for purposes of this tax. RRTA compensation should be separately compared to the
threshold.
Your employer is responsible for withholding the 0.9% Additional Medicare Tax
on Medicare wages or RRTA compensation it pays you in excess of $200,000 in
2026. You should consider this withholding, if applicable, in determining whether
you need to make an estimated payment.
5. Net Investment Income Tax (NIIT). The
NIIT is 3.8% of the lesser of your net investment income or the excess of your
MAGI over a specified threshold amount.
Threshold amounts:
Filing Status
Threshold Amount
Married filing jointly
$250,000
Married filing separately
$125,000
Single
$200,000
Head of household
$200,000
Qualifying surviving
spouse
$250,000
Line 20. Include all the refundable credits
(other than withholding credits) you can claim
because of events that occurred during the period. These include the earned income credit,
additional child tax credit, fuel tax credit, net
premium tax credit, refundable adoption credit,
and refundable American opportunity credit.
Note: When figuring your refundable credits
for each period, annualize any item of income or
deduction used to figure each credit.
Line 29. If line 28 is smaller than line 25 and
you are not certain of the estimate of your 2026
tax, you can avoid a penalty by entering the
amount from line 25 on line 29.
Line 31. For each period, include estimated
tax payments made and any excess social security and railroad retirement tax.
Also, include estimated federal income tax
withholding. One-fourth of your estimated withholding is considered withheld on the due date
of each payment period. To figure the amount to
include on line 31 for each period, multiply your
total expected withholding for 2026 by:
• 25% (0.25) for the first period,
• 50% (0.50) for the second period,
• 75% (0.75) for the third period, and
• 100% (1.00) for the fourth period.
However, you may choose to include your
withholding according to the actual dates on
which the amounts will be withheld. For each
period, include withholding made from the beginning of the period up to and including the
payment due date. You can make this choice
separately for the taxes withheld from your wages and all other withholding. For an explanation of what to include in withholding, see Total
Estimated Tax Payments Needed—Line 14a,
earlier.
Nonresident aliens. If you will file Form
1040-NR and you don’t receive wages as an
employee subject to U.S. income tax withholding, the instructions for the worksheet are modified as follows.
28
1. Skip column (a).
2. On line 1, enter your income for the period
that is effectively connected with a U.S.
trade or business.
3. On line 21, increase your entry by the
amount determined by multiplying your income for the period that isn’t effectively
connected with a U.S. trade or business by
the following.
a. 72% (0.72) for column (b).
b. 45% (0.45) for column (c).
c. 30% (0.30) for column (d).
However, if you can use a treaty rate
lower than 30%, use the percentages determined by multiplying your treaty rate by
2.4, 1.5, and 1, respectively.
4. On line 26, enter one-half of the amount
from line 14c of the Form 1040-ES (NR)
2025 Estimated Tax Worksheet in column
(b) and one-fourth in columns (c) and (d)
of Worksheet 2-9.
5. On lines 24 and 27, skip column (b).
6. On line 31, if you don’t use the actual withholding method, include one-half of your
total expected withholding in column (b)
and one-fourth in columns (c) and (d).
See Pub. 519 for more information.
Estimated Tax
Payments Not Required
You don’t have to pay estimated tax if your withholding in each payment period is at least as
much as:
• One-fourth of your required annual payment, or
• Your required annualized income installment for that period.
You also don’t have to pay estimated tax if
you will pay enough through withholding to keep
the amount you will owe with your return under
$1,000.
How To Pay
Estimated Tax
There are several ways to pay estimated tax.
• Credit an overpayment on your 2025 return
to your 2026 estimated tax.
• Pay by direct transfer from your bank account, or pay by debit or credit card using a
pay-by-phone system or the Internet.
• Send in your payment (check or money order) with a payment voucher from Form
1040-ES.
Credit an Overpayment
If you show an overpayment of tax after completing your Form 1040 or 1040-SR for 2025,
you can apply part or all of it to your estimated
tax for 2026. On Form 1040 or 1040-SR, enter
the amount you want credited to your estimated
tax rather than refunded. Take the amount you
have credited into account when figuring your
Chapter 2
Estimated Tax for 2026
estimated tax payments. If you timely file your
2025 return, treat the credit as a payment made
on April 15, 2026.
If you are a beneficiary of an estate or trust
and the trustee elects to credit 2026 trust payments of estimated tax to you, you can treat the
amount credited as paid by you on January 15,
2027.
If you choose to have an overpayment of tax
credited to your estimated tax, you can’t have
any of that amount refunded to you until you file
your tax return for the following year. You also
can’t use that overpayment in any other way.
Example. When you finished filling out the
2025 tax return, the result was an overpayment
of $750. You knew additional tax would be owed
in 2026. You credited $600 of the overpayment
to the 2026 estimated tax and had the remaining $150 issued as a refund.
In September, you amended the 2025 return
by filing Form 1040-X, Amended U.S. Individual
Income Tax Return. It turned out that you owed
$250 more in tax than was originally thought.
This reduced the 2025 overpayment from $750
to $500. Because the $750 had already been
applied to the 2026 estimated tax or refunded,
the IRS billed you for the additional $250 owed,
plus penalties and interest. You could not use
any of the $600 that had been credited to the
2026 estimated tax to pay this bill.
Pay Online
Paying online is convenient and secure and
helps make sure we get your payments on time.
To pay your taxes online or for more information,
go to IRS.gov/ModernPayments. Payments of
U.S. tax must be remitted to the IRS in U.S. dollars. Digital assets are not accepted. You can
pay using any of the following methods.
• Your Online Account. You can make tax
payments through your online account, including balance payments, estimated tax
payments, or other types. You can also see
your payment history and other tax records
there. Go to IRS.gov/Account.
• IRS Direct Pay. For online transfers directly from your checking or savings account at no cost to you, go to IRS.gov/
Payments.
• Debit Card, Credit Card, or Digital Wallet. To pay by debit or credit card or digital
wallet, go to IRS.gov/Payments. There is a
fee charged by these service providers.
You can also pay by phone with a debit or
credit card. See Debit or credit card under
Pay by Phone, later.
• Electronic Funds Withdrawal (EFW) is
an integrated e-file/e-pay option offered
when filing your federal taxes electronically
using tax preparation software, through a
tax professional, or the IRS at IRS.gov/
Payments.
• Online Payment Agreement. If you can’t
pay in full by the due date of your tax return, you can apply for an online monthly
installment agreement at IRS.gov/OPA.
Once you complete the online process,
you will receive immediate notification of
whether your agreement has been approved. A user fee is charged.
Publication 505 (2026)
Electronic Federal Tax
Payment System (EFTPS)
Allows you to pay your taxes online or by phone
directly from your checking or saving account.
There is no fee for this service but you must be
enrolled. See EFTPS under Pay by Phone, later.
Pay by Phone
Paying by phone is another safe and secure
method of paying electronically. Use one of
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