Guides

Retirees: Withholding Instead of Estimated Tax

Checked October 17, 2026 · Educational summary

General information, not tax, legal or financial advice. We are not the IRS. Check IRS.gov or a qualified tax professional. Sources read on October 17, 2026. Dates for 2027 and later are expected. Examples use made-up numbers. This page contains no affiliate links.

Publication 505 (2026) says tax is usually withheld from pensions and IRA distributions unless you choose otherwise, and that you may ask for withholding from Social Security and some other payments on Form W-4V. If not enough tax is withheld on this income, you may have to pay estimated tax.

What Pub. 505 says by payment type

• Periodic pension/annuity payments: use Form W-4P to tell the payer how much to withhold. If you give no certificate (or no SSN), the payer withholds as if you were Single with no adjustments in Steps 2-4. A certificate takes effect with the first payment made more than 30 days after you submit it (if given before payments start) or at least 30 days after (if given later).
• Nonperiodic payments (not rollover distributions): default withholding is a flat 10%; use Form W-4R line 2 to choose another rate between 0% and 100%.
• Eligible rollover distributions: default 20% on the taxable amount; you cannot choose less than 20%. You may enter a higher rate on W-4R. The pub lists several payments, including hardship distributions and required minimum distributions, that are not eligible rollover distributions.
• Choosing no withholding: for payments other than eligible rollover distributions you may choose none; the payer must still withhold if you do not give your SSN properly.
• Social Security, Tier 1 railroad retirement, unemployment compensation and certain federal payments: you can choose withholding with Form W-4V (or a payer form).
• Military retirement pay and some deferred compensation: use Form W-4, not W-4P.

When estimated tax still matters

Pub. 505 repeats, for each of these income types, that if not enough is withheld you may have to pay estimated tax and could face a penalty. Table 1-1 lists IRA distributions, interest, dividends and capital gains among changes that should prompt a withholding check. The IRS estimated-tax page (reviewed 25 September 2026) says you may owe estimated tax on pensions, interest, dividends and similar income if withholding is not enough, and the generally-used tests are owing $1,000 or more and the 90% / 100% rules; see our safe harbor guide.

Withholding vs estimated payments

The Pub. 505 worksheets count expected withholding "from all sources (wages, pensions and annuities, etc.)" against the required annual payment. This page does not say which approach suits you. For the timing differences, see raise W-4 withholding instead of quarterly payments and how to pay. Next 2026 estimated payment date: January 15, 2027 (dates). Pub. 505 (2026) gives January 15, 2027 as the due date of the last 2026 payment; if you file your 2026 return by January 31, 2027 and pay the full balance, you may not need to make that payment (see the January guide).

FAQ

Can I use Form W-4P if I also have a job?

Pub. 505 says if you have a job, complete Steps 3-4(b) on the job's Form W-4 instead and not on W-4P.

Does the payer have to tell me about the choice not to withhold?

The pub says the payer must send a notice about your right to choose no withholding, generally not if the whole amount is nontaxable.

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