How to adjust my CA DE-4 to prevent large tax refunds each year

[Lubby37]

Hi, I'm Married filing jointly and currently on my CA DE-4 form I have selected the following:

1a. Number of allowances from the Estimated Deductions  = 2

1b. Number of allowances from the Estimated Deductions  = 0

1c. Total Number of Allowances you are claiming  = 2

I get paid weekly - 7 paychecks in 2026 so far.
My 2025 State Tax liability was $6,696 but $9,919 was withheld leaving me with a $3,223 refund. (The last two tax years were similar.)

How do I adjust my CA DE-4 form to lower how much my employer withholds in CA tax each week so that I'm close to breaking even when I file my 2026 return next year? I expect to be paid roughly the same in 2026.

Thanks!

[MonikaK1]

If you qualified for 2 withholding allowances based on your entries for 1a, then you can enter "2" in 1c, total allowances you are claiming. This would reduce your withholding:

• Line 1 - Allowances:
  • 1a: Enter total allowances from Worksheet A (Regular Withholding).
  • 1b: Enter allowances from Worksheet B (Estimated Deductions), if applicable.
  • 1c: Enter the total of 1a + 1b.

Each allowance claimed reduces the amount withheld. If you have other significant sources of income, you could choose to reduce the withholding on one or more of them instead if applicable.

See this California FTB webpage regarding withholding.

[Lubby37]

@MonikaK1 I mis-typed, the 2 allowances from 1a ARE listed in 1c  (Total Number of Allowances)(edited above) in my employer's payroll system. And I'm still double withholding my CA State tax

I always claim the Standard Deduction.

Is my only option to adjust 1b? If so, how?

I had read somewhere that 1b can be a large number: i.e. entering 72 would = $72 less state tax withheld each paycheck (72×45 remaining 2026 paychecks = $3,223 less taken out. Is this true?

[MonikaK1]

If you have more than one source of income, and you have been getting too much back from California, you can choose which source for which to reduce your withholding. If you have figured your estimated tax liability for 2026, you can allocate the withholding whichever way is easiest so that the total liability will be covered by all of your withholding.

See this TurboTax tips article for more information about calculating Federal withholding; the principles are the same.

@Lubby37 

[Lubby37]

Thanks for your assistance @MonikaK1! Seriously not trying to belabour this topic. I get what you are saying--I just need to know if entering a number into "Other Withholding"/1b on the CA State form, does that equate to actual dollars? E.g. entering 72 = $72 fewer CA state taxes withheld each paycheck? In this example, my total allowances on the form would be 74. (2 for total dependents + 72 Other)

I will check out the link as well.

[MonikaK1]

The numbers on 1a, 1b, and 1c are the numbers of withholding allowances calculated from Worksheets A and B, not dollars.

The amount on line 2 is the dollar amount you got from Worksheet C.

@Lubby37