What do I do if I just found out that my employer didn’t take state or federal taxes out of my earnings except once for the whole of last year?

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What do I do if I just found out that my employer didn’t take state or federal taxes out of my earnings except once for the whole of last year?

When I confronted the manager about this issue, I was told that I had to request to have those taxes taken out and if I had it would have been taken. However, this information was never made known to me or some of the other employees I spoke to. Also, the place I was employed at never provided us with a check stub; they only supplied a check. So, it would have been hard to notice if taxes were even taken out at all. Now, I’m told I owe close to $2000 to the IRS because of their shadiness. The company division I worked in has shut down but the company where I was supplied my check from is still open. What do I do?

Asked on January 27, 2016 under Employment Labor Law, North Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The company violated its own obligations under the law by not doing this, and could be sanctioned by the IRS. But as to you, IF the almost $2,000 is the correct taxes that should have been taken out, they would owe you nothing: in the law's eyes (and mathematically/accounting-wise, too), having $2,000 taken out over 52 weeks is the same as paying $2,000 all at once at the end of the year or when the year is over: it's the same $2,000 and you have the same net pay after paying that $2,000 whether you paid it over time or all at once.
If you incurred unnecessary charges (e.g. fees or interest) from the IRS because of the failure to withhold, however, that is  a different story: the company should pay that, and if they don't, you could sue them (possibly in small claims) for that amount.


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