Is my previous employer responsible for not the amount of money not taken out of my pay?

UPDATED: Sep 30, 2022

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Is my previous employer responsible for not the amount of money not taken out of my pay?

My husband and I just recently received out W-2s and our pervious employer did not take out enough federal taxes. He took out $1 a week per check when he should have been taking $75 a week per check. I’ve been told that we never filled out W-4’s for the company and because of that we are responisible for the $1,300 that we will owe the IRS for not putting in enough federal tax. Is my previous employer at fault for this? Should he be paying the bill?

Asked on February 7, 2017 under Employment Labor Law, Michigan


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

No, they employer is not liable for the bill. Your taxes are the same, whether they were taken out of your paychecks and sent directly to the IRS (withheld) or whether all the money was sent to you (almost no or no withholding) and then you have to pay the IRS at the end of the year: the timing is different, but the total amount you have to pay is the same (since your income taxes are based on income, not when you pay it). Example: say that you are in (to oversimplify) a 20% tax bracket (20% of your income goes to taxes) and you earned $50,000 for the year. Let's also use a 50-week year for easy math. You owe $10,000 in taxes (ignoring deductions, like for a mortgage or property taxes). If the employer took out $200 per week for 50 weeks, that's the $10,000--you received $40,000 in pay after withholding and don't owe any more at the end the year. Say instead they forgot to withhold: then you received all $50k in your paychecks, and no pay the $10k to the IRS, leaving you with the same $40k It is the same amount either way. Therefore, there is nothing to hold them liable for--you are not paying any more money and there is nothing to recover from them. Furthermore, it is also your responsibility to check your paystubs or direct deposit each week to make sure the right amount  is being withheld--your taxes are your responsibility.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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