• filter:

Who is responsible to withhold FICA taxes?

  • Page :
  • 1
  • Text Only
  • Search this Topic »
Voting History
rated:
~~My Employer didn't withhold the Social Security and the Medicare taxes from my paystubs. It's been 2 years now, and the tax preparer just notified me when I filed the tax return this year. I went back to my previous W-2 and it's the same. It has a blanks for SS and Medicare. The only taxes they are withholding are the Federal, State, LST, and Unemployment taxes (No Social, No Medicare).When I joined my employer, I was on Student VISA/OPT and at that time, it looks no FICA tax needed to be withheld. However, they filed my H1-B and then -based on what I red online- these taxes should apply since that date. So obviously, it looks that my employer didn't update their payroll with the correct status, and for me I have no knowledge about all these tax regulations and deductions.My question in the first place, do I owe IRS for the past period (since I moved to H1-B date) almost 2 years?
2. who is liable for this mistake and who needs to pay?
3. And if I am liable for my share, do I need to pay back the period when I moved to H1-B or the employer just can start withhold this tax starting this month and moving on.Can you please advise?

Member Summary
Staff Summary
Thanks for visiting FatWallet.com. Join for free to remove this ad.

rated:
If you have a W2 then your employer. If you have a 1099 then you have to pay it.
Edit: I'm talking bout the employer's portion of the FICA. †Your portion is there regardless of whether you're W2 or 1099.

rated:
hasbit said:   ~~My Employer didn't withhold the Social Security and the Medicare taxes from my paystubs. It's been 2 years now, and the tax preparer just notified me when I filed the tax return this year. I went back to my previous W-2 and it's the same. It has a blanks for SS and Medicare. The only taxes they are withholding are the Federal, State, LST, and Unemployment taxes (No Social, No Medicare).When I joined my employer, I was on Student VISA/OPT and at that time, it looks no FICA tax needed to be withheld. However, they filed my H1-B and then -based on what I red online- these taxes should apply since that date. So obviously, it looks that my employer didn't update their payroll with the correct status, and for me I have no knowledge about all these tax regulations and deductions.My question in the first place, do I owe IRS for the past period (since I moved to H1-B date) almost 2 years?
2. who is liable for this mistake and who needs to pay?
3. And if I am liable for my share, do I need to pay back the period when I moved to H1-B or the employer just can start withhold this tax starting this month and moving on.Can you please advise?

† Yes.
Let payroll/HR know about their error. Assuming you are W2, they are required to withhold FICA and pay their share of it together with the withheld amount from your paycheck.
Yes, you need to pay it from the day you were required to (presumably from when your visa status changed).

rated:
They should have been withholding the taxes (assuming you're a W-2 employee, and not a 1099 contractor), but the fact that they didn't withhold doesn't mean you aren't obliged to pay.

rated:
On a W2, you are responsible for 6.2% SS and 1.45% Medicare. Your employer would be responsible for the same amount.

If it's a 1099 (lower probability), then you owe double the amount if you were a W2. Either way, need to pay the above amount at a minimum, and hopefully no penalties apply.

rated:
Thank you everyone! As I mentioned in my question, I am on W-2 with my employer. I am still not understanding though why would I need to be responsible for this employer mistake? I don't have that much knowledge about these regulations as a foreigner, nevertheless, I am not in a position to educate a company what taxes they should withhold from†my salary!
Now, I don't mean to criticize your answers and I do appreciate your help! But it is hard to believe that I need to pay all this money now because they commit this fatal mistake. I don't even have this big amount right now! We are talking about 2 years if not even more, I did file my return each year and one noticed this neither thea tax preparer nor IRS!!!
I have no problem at all when the employer withhold these taxes on monthly basis, but now after this got accumulated; Its a problem!
On the other hand, as I was searching on this, I red that IRS come after the employer on these taxes not after the employee. Not sure if this is true, but I am wondering how can I pay this big amount now? Is it for IRS, or my employer will try to withhold more money from now on?

Any ideas? Any similar issues or stories? Any links that can help read through this?

Thank you!

rated:
You people that are answering don't know about the rules of STUDENT employees at Universities. I don't know them all either.

However, to the OP ignore everything that you've read. You are in a special class all to yourself, and you need someone to help you that knows this stuff from a UNIVERSITY STUDENT WORKER perspective.

rated:
Chyvan said:   You people that are answering don't know about the rules of STUDENT employees at Universities. I don't know them all either.

However, to the OP ignore everything that you've read. You are in a special class all to yourself, and you need someone to help you that knows this stuff from a UNIVERSITY STUDENT WORKER perspective.

† OP said he/she's on an H-1B. That's not a student visa, so either OP is on the wrong visa or OP's not a student. OP - sorry, can't help you with you're ultimate question, but generally, even when something isn't your fault, you're generally still liable for the ultimate amount you would've been obligated to pay. However, I'm not sure if this necessarily is the case in this circumstance. Obviously you know more about your employer than anyone else here. What do you think they'd say/do if you brought this to their attention?

rated:
hasbit said:   Thank you everyone! As I mentioned in my question, I am on W-2 with my employer. I am still not understanding though why would I need to be responsible for this employer mistake? I don't have that much knowledge about these regulations as a foreigner, nevertheless, I am not in a position to educate a company what taxes they should withhold from†my salary!
Now, I don't mean to criticize your answers and I do appreciate your help! But it is hard to believe that I need to pay all this money now because they commit this fatal mistake. I don't even have this big amount right now! We are talking about 2 years if not even more, I did file my return each year and one noticed this neither thea tax preparer nor IRS!!!
I have no problem at all when the employer withhold these taxes on monthly basis, but now after this got accumulated; Its a problem!
On the other hand, as I was searching on this, I red that IRS come after the employer on these taxes not after the employee. Not sure if this is true, but I am wondering how can I pay this big amount now? Is it for IRS, or my employer will try to withhold more money from now on?

Any ideas? Any similar issues or stories? Any links that can help read through this?

Thank you!

††
As a full time student you would be Exempt: †(from†https://www.irs.gov/charities-non-profits/student-exception-to-fica-tax)
IRS said: FICA (Social Security and Medicare) taxes do not apply to service performed by students employed by a school, college or university where the student is pursuing a course of study. Whether the organization is a school, college or university depends on the organizationís primary function. In addition, whether employees are students for this purpose requires examining the individualís employment relationship with the employer to determine if employment or education is predominant in the relationship.



Otherwise you are ultimately responsible for paying your half -- and the employer is responsible for his/her half. †If you were 1099 then you are responsible for both halves.

rated:
hasbit said:   Thank you everyone! As I mentioned in my question, I am on W-2 with my employer. I am still not understanding though why would I need to be responsible for this employer mistake? I don't have that much knowledge about these regulations as a foreigner, nevertheless, I am not in a position to educate a company what taxes they should withhold from†my salary!
Now, I don't mean to criticize your answers and I do appreciate your help! But it is hard to believe that I need to pay all this money now because they commit this fatal mistake. I don't even have this big amount right now! We are talking about 2 years if not even more, I did file my return each year and one noticed this neither thea tax preparer nor IRS!!!
I have no problem at all when the employer withhold these taxes on monthly basis, but now after this got accumulated; Its a problem!
On the other hand, as I was searching on this, I red that IRS come after the employer on these taxes not after the employee. Not sure if this is true, but I am wondering how can I pay this big amount now? Is it for IRS, or my employer will try to withhold more money from now on?

Any ideas? Any similar issues or stories? Any links that can help read through this?

Thank you!

† Employers mistake is in not paying their portion of the FICA and not withholding your portion and remitting it. Employer is responsible for correcting that. But you still owe your part of it --- you cannot get away with it. Depending on your employer and if you make some noise, you can probably try to convince them to "help" you with the big tax bill. They may decide to pitch in some or all of it but it is entirely up to them (they are not obligated to).

Why dont you bring it to their attention first to see what they have to say.

rated:
Step 1: Make sure now that you know that these taxes need to be withheld that your employer starts doing that. If you haven't done that already, do it TODAY!
Step 2: Figure out how much should have been withheld from the date they should have started withholding it to the date they do start withholding it. That is your new savings goal. Do whatever you can to get that much money saved up and DON'T TOUCH IT.
Step 3: If your employer is a small business with an owner you know that has treated you well, talk to him about this situation so they know that they are in a predicament too. If they are a giant faceless multi-billion dollar corporation, don't worry about telling them that the IRS might come after them for their screw-up.
Step 4: Go about your life. If the IRS comes calling, do your best to negotiate what you owe down with the same information you used here - your employer messed up and you had no idea and you can only afford $XXX. When they give you a final number, pay it or set up some sort of payment plan. If you never hear from them in about 10 or so years, you can assume they will probably never figure it out and you now have a nice chunk of savings to spend on something. I suggest putting it into your retirement since you fleeced the system that will eventually be bankrupt and you contributed a teeny tiny amount to that bankruptcy lol. You're welcome (that's from us taxpayers that actually had the proper amount withheld from our paychecks).

You may think you don't owe this money because it was someone else's fault, but the fact is that YOU got the money that was supposed to go to the government. It doesn't matter who committed the mistake, YOU benefited from it. Since that money ended up in YOUR account, it's YOUR responsibility to pay it back. But there is nothing saying that you have to tell them about the mistake. It was a mistake and not done on purpose. If that's the truth, then fix the mistake and let them find it.

rated:
hasbit said:   ~~My Employer didn't withhold the Social Security and the Medicare taxes from my paystubs. It's been 2 years now, and the tax preparer just notified me when I filed the tax return this year. I went back to my previous W-2 and it's the same. It has a blanks for SS and Medicare. The only taxes they are withholding are the Federal, State, LST, and Unemployment taxes (No Social, No Medicare).When I joined my employer, I was on Student VISA/OPT and at that time, it looks no FICA tax needed to be withheld. However, they filed my H1-B and then -based on what I red online- these taxes should apply since that date. So obviously, it looks that my employer didn't update their payroll with the correct status, and for me I have no knowledge about all these tax regulations and deductions.My question in the first place, do I owe IRS for the past period (since I moved to H1-B date) almost 2 years?
2. who is liable for this mistake and who needs to pay?
3. And if I am liable for my share, do I need to pay back the period when I moved to H1-B or the employer just can start withhold this tax starting this month and moving on.Can you please advise?


Sounds like you need advice from a tax pro here.

The employer is probably in more hot water than you.

  • Quick Reply:  Have something quick to contribute? Just reply below and you're done! hide Quick Reply
     
    Click here for full-featured reply.


Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2017