Updated October 18, 2026. Quick answer: Step 2 of Form W-4P is for people with a job, more than one pension or annuity, or a spouse with either. You pick the estimator on line 2(a) or fill in items 2(b)(i) to (iii), and the total in item (iii) tells the payer about the other income. It also decides which payer completes Steps 3 to 4(b).
IRS worksheets read line by line: W-4 Multiple Jobs Worksheet and W-4P Deductions Worksheet.
What this part is for
Step 2 is the part of the Form W-4P certificate for income beyond the pension in front of you. The form says “Complete this step if you (1) have income from a job or more than one pension/annuity”. The instructions repeat it: “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 step is also the place where a household with several payers settles which payer carries the credits and adjustments, which the next page, Form W-4P Step 3, picks up.
The lines, one by one
| Line | What the form says |
|---|---|
| Step 2, who it is for | “Complete this step if you (1) have income from a job or more than one pension/annuity, or (2) are married filing jointly and your spouse receives income from a job or a pension/annuity.” “Do only one of the following.” |
| 2(a) | Use the estimator “for the most accurate withholding for this step”. The line adds: “If you or your spouse have” self-employment “income, use this option; or” |
| 2(b) | “Complete the items below.” |
| 2(b)(i) | “If you (and/or your spouse) have one or more jobs, then enter the total taxable annual pay from all jobs, plus any income entered on Form W-4, Step 4(a), for the jobs, minus the deductions entered on Form W-4, Step 4(b), for the jobs.” “Otherwise, enter” “-0-“. |
| 2(b)(ii) | “If you (and/or your spouse) have any other pensions/annuities that pay less annually than this pension/annuity, then enter the total annual taxable payments from all” lower-paying “pensions/annuities.” “Otherwise, enter” “-0-“. |
| 2(b)(iii) | “Add the amounts from items (i) and (ii) and enter the total here” |
| After 2(b)(iii) | Complete Steps 3 to 4(b) “on this form only if (b)(i) is blank and this pension/annuity pays the most annually.” “Otherwise, do not complete” Steps 3 to 4(b) on this form. |
| TIP under 2(b)(iii) | “To be accurate, submit a new Form W-4P for all other pensions/annuities if you haven’t updated your withholding since 2021 or this is a new pension/annuity that pays less than the other(s).” |
The step before it is covered at Form W-4P Step 1. The form also notes the effect of a spouse’s income: “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.”
Where the number comes from
Item (i) draws on your pay from jobs and on what you entered on Form W-4: “plus any income entered on Form W-4, Step 4(a), for the jobs, minus the deductions entered on Form W-4, Step 4(b), for the jobs.” The Form W-4 guide covers that form. Item (ii) draws on your other, lower-paying pensions and annuities. The pension payers’ year-end statements, which report withholding in Form 1099-R box 4, can help you see what is already being paid.
The instructions list situations for using the estimator. One reads: “Have social security, dividend, capital gain, or business income, or are subject to the Additional Medicare Tax or Net Investment Income Tax;” The retirement withholding calculator is a companion tool on this site.
Where it goes next
Item (iii) feeds the rest of the form. Which payer completes the later steps is the point of this caution: “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.” “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.”
For how withheld tax is reported on the return, see Form 1040 line 25. See Form W-4P Step 4 for the extra-withholding line.
A worked example
This page uses the form’s own four examples, which the instructions give to “assist you in completing Step 2(b).” The people in them are the form’s illustrations; only the quoted sentences are the form’s facts.
| Example | The facts | What the form says to enter |
|---|---|---|
| Example 1 | “Taylor also has a job that pays $25,000 a year.” | “Taylor will enter $25,000 in Step 2(b)(i) and in Step 2(b)(iii).” |
| Example 2 | “Casey does not have a job, but receives another pension for $25,000 a year (which pays less annually than the $50,000 pension).” | “Casey will enter $25,000 in Step 2(b)(ii) and in Step 2(b)(iii).” |
| Example 3 | “Sam does not have a job, but receives another pension for $75,000 a year (which pays more annually than the $50,000 pension).” | “Sam will not enter any amounts in Step 2.” |
| Example 4 | “Alex also has a job that pays $25,000 a year and another pension that pays $20,000 a year.” | “Alex will enter $25,000 in Step 2(b)(i), $20,000 in Step 2(b)(ii), and $45,000 in Step 2(b)(iii).” |
Each example is extended by an interest-income variation. For the job case, the form says “she will instead enter $26,000 in Step 2(b)(i) and in Step 2(b)(iii).” For the case with a job and another pension, “he 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).”
Edition and line numbers
This page reads the 2026 version of Form W-4P, the current file irs.gov served on 2026-10-18. A payer may still be applying an earlier election; check the date and year printed on your own form. Use the line numbers and step letters printed on the copy you are holding, because a different edition can number or word them differently.
Common mistakes
- Completing Steps 3 to 4(b) on every pension. The caution says “Leave those steps blank for the other pensions/annuities.”
- Completing Steps 3 to 4(b) here when you have a job. The caution says “do NOT complete Steps 3 through 4(b) on Form W-4P.”
- Skipping updates after the first certificate. The TIP says “submit a new Form W-4P for all other pensions/annuities if you haven’t updated your withholding since 2021”
Related: Form W-4P, Form W-4, retirement withholding calculator, Form 1099-R box 4, and Form 1040 line 25.
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Answer againSources
- Form W-4P (2026), Withholding Certificate for Periodic Pension or Annuity Payments: https://www.irs.gov/pub/irs-pdf/fw4p.pdf
- IRS: About Form W-4P: https://www.irs.gov/forms-pubs/about-form-w-4p
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.