What is Federal Income Tax (FIT)?

Federal Income Tax (FIT) is the tax your employer withholds from each paycheck based on the information you provided on Form W-4. The amount withheld depends on your filing status, number of dependents, additional withholding, and the current IRS tax brackets (10% to 37% for 2026). Unlike FICA, the amount withheld is an estimate — your actual tax liability is reconciled when you file your annual tax return. If too much was withheld, you get a refund; too little means you owe.