2026 Tax Withholding Updates – Important Information for Employees

Posted on February 19, 2026 by Tracey Holyfield, Accounting Section Manager, Department of Finance
zoomed in photo of hundred dollar bills laying on top of W-4 and W-9 forms

What’s Changing?

Under Public Law 119-21, the One Big Beautiful Bill Act (OBBBA), signed on July 4, 2025, introduces several new and enhanced tax deductions:

✅ New income tax deductions for qualified overtime
✅ Enhanced deduction for seniors (age 65 and older)
✅ Increased standard deduction and child tax credit
✅ Higher limit on itemized deductions for state and local taxes

Action Required

If you want these deductions reflected in your paycheck withholding:
Submit a new 2026 Form W-4 through Employee Direct Access, OR

📄 Download the 2026 Form W-4

Note: If you do not submit a new Form W-4, your withholding will remain based on your previously submitted form.

Before You Update

  • Review the instructions included with Form W-4 carefully.
  • Consider consulting a tax professional if needed.
  • Use the updated Deductions Worksheet on page 4 and enter your total in Step 4(b).

Helpful Tools

The IRS Tax Withholding Estimator has been updated for some deductions:
Tax Withholding Estimator – About You | Internal Revenue Service

Tip: Have your most recent pay statement and tax return handy.
⚠️ Use either the updated Deductions Worksheet or the estimator—not both.

Looking Ahead

  • If you update your withholding for 2026, recheck and adjust at the beginning of 2027.
  • Your Form W-4 remains in effect until you submit a new one.