What Happened to W-4 Line 7 for Claiming Exemption?

Employees familiar with older versions of the IRS Form W-4 often look for Line 7 to claim an exemption from federal income tax withholding. However, that specific line no longer exists. The IRS redesigned the Form W-4, Employee’s Withholding Certificate, starting in the 2020 tax year. This overhaul was a direct result of the Tax Cuts and Jobs Act of 2017, which eliminated personal exemptions.

The Role of the Old W-4 Line 7

On W-4 forms issued before 2020, Line 7 served a single, specific purpose: it was where an employee would write “Exempt” to certify that they should have no federal income tax withheld from their paychecks. Using this line was not a matter of preference but was governed by strict IRS rules. To legally claim this status, an employee had to meet two distinct conditions for the year they were filing the form.

The first condition was that the employee had no federal tax liability in the prior tax year. In practical terms, it meant they were entitled to a full refund of any federal income tax that had been withheld from their pay during that previous year.

The second, concurrent condition was that the employee must have reasonably expected to have no federal tax liability for the current year. If an individual met both of these requirements, they could write “Exempt” on Line 7, sign the form, and their employer would not take out federal income taxes for that calendar year.

How to Claim Exemption on the Current W-4

While the dedicated Line 7 is gone, the ability to claim an exemption from withholding still exists on the current Form W-4. The process for informing your employer is now integrated into the form’s main structure.

To claim an exemption on a post-2019 Form W-4, you must complete only a few specific parts. First, you fill out your personal information in Step 1, which includes your name, address, Social Security number, and filing status. You must then skip Steps 2, 3, and 4, leaving them completely blank. These steps are for adjustments related to multiple jobs, dependents, and other income or deductions, which are not applicable if you expect no tax liability.

The final action is to write the word “Exempt” in the space provided below Step 4(c). After writing “Exempt,” you proceed directly to Step 5 to sign and date the form. An exemption from withholding is only valid for one calendar year. To maintain your exempt status for the following year, you must submit a new Form W-4 by February 15 of that year.