Is it illegal for an employer to not take out federal taxes from payroll if the employee claims zero?

UPDATED: Jan 22, 2018

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Is it illegal for an employer to not take out federal taxes from payroll if the employee claims zero?

I have received my W-2 for 2017 and although I claimed zero and non-exempt
on my taxes, my employer did NOT take out any federal taxes.

Asked on January 22, 2018 under Employment Labor Law, Maryland


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Yes, they should have withheld based on what you claimed, but there is no real harm to you: whether the money was withheld earlier or you pay it now with your tax return, it is the same amount of taxes--you don't pay any more money by paying it now rather than having it withheld throughout the year. Work with a tax preparer to make sure you properly calculate what you need to pay in taxes.

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