Rosa anticipates receiving a $500 credit for other dependents on her 2023 tax return. If she is not looking for a huge tax refund, how should Rosa treat the credit when completing her 2023 Form W-4, Employee's Withholding Certificate?

Rosa should:

Complete Step 2, Multiple Jobs or Spouse Works, on her 2023 Form W-4 and use the Multiple Jobs Worksheet to calculate her adjustment.

Complete Step 3, Claim Dependent and Other Credits, on her 2023 Form W-4.

Use Step 4, Other Adjustments, on the 2023 Form W-4. She should enter the $500 of anticipated credit as a deduction in Step 4(b).

Use Step 4, Other Adjustments, on the 2023 Form W-4 and enter the credit as a negative amount in Step 4(a), Other Income (not from jobs). Reducing her taxable income in this way will be virtually the same as applying the credit to her income.