Federal Withholding Tax
Federal income tax withheld from your paycheck based on your W-4 elections. This goes directly to the IRS.
Who pays it
Every W-2 employee whose income exceeds the federal exemption threshold for their filing status. The exact amount withheld depends on your W-4 form.
How much
Highly variable. Based on your W-4 elections, filing status, and the IRS withholding tables. Typical W-2 employees see 10–22% of taxable wages withheld.
Where it appears on your W-2
Box 2 of your W-2.
Tax impact
FWT is a prepayment toward your annual federal income tax bill. When you file your return, you reconcile: if you withheld too much, you get a refund; too little and you owe.
Common questions about FWT
Why is my FWT so low (or zero)?
Most common reasons: your W-4 claims many dependents, you claimed 'exempt,' or your earnings are below the standard deduction threshold.
How do I increase my FWT withholding?
Submit a new W-4 to HR with a smaller dependent number or specify an extra dollar amount on Step 4(c).
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