Incorrect withholdings entered

imjustme · January 2004

We have an employee that filled out a w-4 as a new hire, but forgot to mark whether single, married, or what his status is. Unfortunately, either the payroll person did not ask which was correct, or did, and the employee did not respond. Payroll then entered married when it should have been single. Now that w-2's are here the employee has noticed the problem. As new payroll person I had him fill out a new w-4 and have corrected the problem for the future. For now though, what liability does the company have for the incorrect amounts filed on behalf of the employee? Do we owe it to him? Any help would be appreciated. Thanks.

cthr · January 2004

It is the employees responsiblility to provide you with the correct information. That said, if an employee does not check one of the boxes and does not respond to a request for the information, we err on the side of caution and withhold at the single rate. We also send them a letter stating that we have done this and if they wish to change their withholding, they need to come in and fill out the form correctly.

Why did your payroll person check married?

imjustme · January 2004

Unfortunately I do not know why married was marked in the payroll system. Now after an entire year of the wrong withholding the employee is quite upset.

SMace · January 2004

The employee will settle up the withholding mistake when he does his taxes. I would be very apologetic and chalk it up to experience. There is nothing you can do for the ee now.

amwkim · January 2004

I agree. You may want to encourage ALL employees to verify that the information on their check stubs is correct.

MrCreosote · January 2004

You write that the employee has noticed the problem. First, they can't know if there is a "problem" until they do their taxes. Second, it may be a minor inconvenience if they owe money, and you should apologize for that, but the error did not, in any way whatsoever, affect the actual amount of taxes - only the timing of the payment.

You have no liability and you owe him nothing.

HRQ · January 2004

Our paystubs indicate single/married, # of exemptions and state %, in addition to the earnings record. Unfortunately, employees tend to look at the cash value of the check and nothing else.

A few times a year, we put stickers on the check envelopes reminding employees to verify SSN, tax info, spelling of name, address, etc. on the paystub. We print them on colored labels, or use colored ink on white labels to make them stand out.

Of course we still get a lot of returned W-2's, name corrections, etc, but putting occasional reminders on the envelopes has helped a little bit. It also helps us put the problem back in the employee's lap. "Remember the stickers on the envelopes reminding you to send us the updates?"

Incorrect withholdings entered

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