Form W-4P (2022)
Page 2
General Instructions
Section references are to the Internal Revenue Code.
Future developments. For the latest information about any
future developments related to Form W-4P, such as legislation
enacted after it was published, go to www.irs.gov/FormW4P.
Purpose of form. Complete Form W-4P to have payers
withhold the correct amount of federal income tax from your
periodic pension, annuity (including commercial annuities),
profit-sharing and stock bonus plan, or IRA payments. Federal
income tax withholding applies to the taxable part of these
payments. Periodic payments are made in installments at
regular intervals (for example, annually, quarterly, or monthly)
over a period of more than 1 year. Don’t use Form W-4P for a
nonperiodic payment (note that distributions from an IRA that
are payable on demand are treated as nonperiodic payments) or
an eligible rollover distribution (including a lump-sum pension
payment). Instead, use Form W-4R, Withholding Certificate for
Nonperiodic Payments and Eligible Rollover Distributions, for
these payments/distributions. For more information on
withholding, see Pub. 505, Tax Withholding and Estimated Tax.
Choosing not to have income tax withheld. You can choose
not to have federal income tax withheld from your payments by
writing “No Withholding” on Form W-4P in the space below
Step 4(c). Then, complete Steps 1a, 1b, and 5. Generally, if you
are a U.S. citizen or a resident alien, you are not permitted to
elect not to have federal income tax withheld on payments to be
delivered outside the United States and its possessions.
Caution: If you have too little tax withheld, you will generally
owe tax when you file your tax return and may owe a penalty
unless you make timely payments of estimated tax. If too much
tax is withheld, you will generally be due a refund when you file
your tax return. If your tax situation changes, or you chose not
to have federal income tax withheld and you now want
withholding, you should submit a new Form W-4P.
Self-employment. Generally, you will owe both income and
self-employment taxes on any self-employment income you (or
you and your spouse) receive. If you do not have a job and want
to pay these taxes through withholding from your payments,
you should enter the self-employment income in Step 4(a). Then
compute your self-employment tax, divide that tax by the
number of payments remaining in the year, and include that
resulting amount per payment in Step 4(c). You can also add
half of the annual amount of self-employment tax to Step 4(b) as
a deduction. To calculate self-employment tax, you generally
multiply the self-employment income by 14.13% (this rate is a
quick way to figure your self-employment tax and equals the
sum of the 12.4% social security tax and the 2.9% Medicare tax
multiplied by 0.9235). See Pub. 505 for more information,
especially if your self-employment income multiplied by 0.9235
is over $147,000.
Payments to nonresident aliens and foreign estates. Do not
use Form W-4P. See Pub. 515, Withholding of Tax on
Nonresident Aliens and Foreign Entities, and Pub. 519, U.S. Tax
Guide for Aliens, for more information.
Tax relief for victims of terrorist attacks. If your disability
payments for injuries incurred as a direct result of a terrorist
attack are not taxable, write “No Withholding” in the space
below Step 4(c). See Pub. 3920, Tax Relief for Victims of
Terrorist Attacks, for more details.
Specific Instructions
Step 1(c). Check your anticipated filing status. This will
determine the standard deduction and tax rates used to
compute your withholding.
Step 2. Use this step if you have at least one of the following:
income from a job, income from more than one pension/annuity,
and/or a spouse (if married filing jointly) that receives income
from a job/pension/annuity. The following examples will assist
you in completing Step 2.
Example 1. Bob, a single filer, is completing Form W-4P for a
pension that pays $50,000 a year. Bob also has a job that pays
$25,000 a year. Bob has no other pensions or annuities. Bob will
enter $25,000 in Step 2(b)(i) and in Step 2(b)(iii).
If Bob also has $1,000 of interest income, which he entered on
Form W-4, Step 4(a), then he will instead enter $26,000 in Step
2(b)(i) and in Step 2(b)(iii). He will make no entries in Step 4(a) on
this Form W-4P.
Example 2. Carol, a single filer, is completing Form W-4P for
a pension that pays $50,000 a year. Carol does not have a job,
but she also receives another pension for $25,000 a year (which
pays less annually than the $50,000 pension). Carol will enter
$25,000 in Step 2(b)(ii) and in Step 2(b)(iii).
If Carol also has $1,000 of interest income, then she will enter
$1,000 in Step 4(a) of this Form W-4P.
Example 3. Don, a single filer, is completing Form W-4P for a
pension that pays $50,000 a year. Don does not have a job, but
he receives another pension for $75,000 a year (which pays
more annually than the $50,000 pension). Don will not enter any
amounts in Step 2.
If Don also has $1,000 of interest income, he won’t enter that
amount on this Form W-4P because he entered the $1,000 on
the Form W-4P for the higher paying $75,000 pension.
Example 4. Ann, a single filer, is completing Form W-4P for a
pension that pays $50,000 a year. Ann also has a job that pays
$25,000 a year and another pension that pays $20,000 a year.
Ann will enter $25,000 in Step 2(b)(i), $20,000 in Step 2(b)(ii), and
$45,000 in Step 2(b)(iii).
If Ann also has $1,000 of interest income, which she entered on
Form W-4, Step 4(a), she will instead enter $26,000 in Step 2(b)
(i), leave Step 2(b)(ii) unchanged, and enter $46,000 in Step 2(b)
(iii). She will make no entries in Step 4(a) of this Form W-4P.
If you are married filing jointly, the entries described above do
not change if your spouse is the one who has the job or the
other pension/annuity instead of you.
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CAUTION
Multiple sources of pensions/annuities or jobs. If you
(or if married filing jointly, you and/or your spouse) have a
job(s), do NOT complete Steps 3 through 4(b)
on Form W-4P. Instead, complete Steps 3 through 4(b) on the
Form W-4 for the job. If you (or if married filing jointly, you and
your spouse) do not have a job, complete Steps 3 through 4(b)
on Form W-4P for only the pension/annuity that pays the most
annually. Leave those steps blank for the other pensions/
annuities.
Step 3. This step provides instructions for determining the
amount of the child tax credit and the credit for other
dependents that you may be able to claim when you file your
tax return. To qualify for the child tax credit, the child must be
under age 17 as of December 31, must be your dependent who
generally lives with you for more than half the year, and must
have the required social security number. You may be able to
claim a credit for other dependents for whom a child tax credit
can’t be claimed, such as an older child or a qualifying relative.
For additional eligibility requirements for these credits, see Pub.
501, Dependents, Standard Deduction, and Filing Information.
You can also include other tax credits for which you are eligible
in this step, such as the foreign tax credit and the education tax
credits. Including these credits will increase your payments and
reduce the amount of any refund you may receive when you file
your tax return.
