W4

[aishazeek]

I’m married with 2 children. One is 15 and the other will be 18 on the 31st of this month. Are we both suppose claim them as dependents on our W-4 or just my husband since he had the higher paying job?

[Vanessa A]

You would only claim them on one W-4.  This is taking into consideration the child tax credit which you only get one per child. 

Your 18 year old is not eligible for the Child Tax Credit, so you would only have one.  Your 18 year old may qualify for the Other Dependent Credit on your 2023 taxes, but depending on what they do after graduation, they may or may not qualify as a dependent next year. 

If you claim them on your W4 you are basically getting your child tax credit and other dependent credit now instead of at the end of the year. 

[aishazeek]

What’s the difference between exemptions and allowances?

[DaveF1006]

It depends on the context of your question.  If you are referring to a W4, the IRS addresses this in this topic. If an employee qualifies, he or she can also use Form W-4 to tell you not to deduct any federal income tax from his or her wages. To qualify for this exempt status, the employee must have had no tax liability for the previous year and must expect to have no tax liability for the current year. 

Allowances were used for a taxpayer to list how many dependents were in his/her household. You could list as many allowances you wished to list and the more allowances you listed, the less tax was withheld from your paycheck. At the end of the year however, you may have ended up owing taxes than receiving that nice refund that you expected. For this reason, the W4 does not address allowances any longer in its current form.  It is now defunct. 

If the context of your question does not involve a W4, please provide more specific details about your question.