This section asks for employees to identify themselves (name, address, Social Security number, and how they plan to file – (single, married filing jointly, etc.). 

This step is the most significant change from previous W-4s, and it calls for employees to account for money earned from other jobs, as well as a spouse’s salary. This step will enable an employee to get the most accurate amount to withhold, and there are several options to take.
Employees should only do one of the options, which include using the IRS Withholding Estimator (most accurate) or the Multiple Jobs Worksheet (roughly accurate). Self-employed individuals also should use the estimator

http://www.irs.gov/individuals/tax-withholding-estimator
The employees who would complete this step include those who hold more than one job at a time or are married and filing jointly (and the spouse works). The filer would then complete steps 3 to 4(b), and to get the most accurate withholding it should be done for the highest-paying job.

Can Employees Skip Any Steps?

Employees who have one job and are not married or are married and filing separately can skip step 2. Step 4 is optional (more details below).

These are tax credits, not allowances. The income levels changed as did the credits, and individuals now phase out of the tax credit at a higher income threshold. A filer with an income level of $200,000 or less ($400,000 or less if married filing jointly) will receive a $2,000 child tax credit for any dependent younger than 17, as well as $500 for any other dependent, including an older parent being cared for in the household.

This step includes listing other sources of income that are not job related such as interest, dividends, and retirement income, as well as other deductions other than the standard deduction. Employees might have questions about this section because it allows visibility into their entire income amount.
This step is optional. It would give employees the most accurate withholding amount but it requires a lot of work to fill out the Deductions Worksheet.
Employees have the option in this section – 4(c) – to enter any extra withholding or additional tax they want taken out each pay period.

How Can an Employee Claim Exemption from Federal Withholding?

If an employee meets certain conditions (under General Instructions, Purpose of Form, Exemption from withholding), they may claim exemption.  An employee who qualifies for exemption, must only complete steps 1(a), 1(b), which is their name, address, and Social Security number, and step 5 (signature).

They must also write the word “Exempt” beneath Section 4(c) and above the line that begins step 5. It should be noted that these employees will need to submit a new Form W-4 by Feb. 16, of the following calendar year in order to continue claiming exemption.

Incomplete, unsigned and/or illegible forms will not be processed.   Until a completed form is submitted to the payroll department, the District will withhold income tax from your wages as if you are single with zero allowances.