Withholding Allowance

A withholding allowance is a number claimed on a withholding form that lowers the tax taken from each paycheck. The federal Form W-4 used allowances until 2019. Many state forms still do, and each allowance is worth a set dollar amount in the state's formula.

States use allowances in two ways. In some, each allowance takes a fixed amount off taxable wages before the tax is figured. In others it is a credit that comes straight off the tax. The FAQ explains what a withholding allowance is in plain terms, and the state withholding allowances page lists how each state counts them.

More allowances mean a bigger paycheck and a smaller refund. Read how many allowances to claim, or enter your state count in any state paycheck calculator. State withholding shows on your stub as SWT. The federal side is covered under Form W-4.