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Ask Asad Rahman Your Own Question
Asad Rahman
Asad Rahman, Lawyer
Category: Employment Law
Satisfied Customers: 1722
Experience:  Practicing Attorney with 10 years experience
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I am a state employee in Maryland and have been working a

Customer Question

I am a state employee in Maryland and have been working for almost a year.
Today, I received an email with a letter informing me that they had made a mistake in withholding my taxes and that a sum was owed. That because it was their mistake, the state will charge them the sum.
Further, that I can pay a lump sum or enlist six-month payment plan to my employer for this sum.
I'm not clear what circumstances an employee should be required to pay an employer, particularly since it was explained that I was not being held in fault.
Wouldn't I just owe the state rather than the state institution I work for? And if I don't owe the state because the institution is at fault, why do I owe the institution? Further, what reasonable penalty might I incur for not complying? (i.e. Can they ding my credit score or delay paychecks?)
Submitted: 10 months ago.
Category: Employment Law
Expert:  Asad Rahman replied 10 months ago.

Well, they have to report your earnings and withhold your taxes because you are a W2 employee. It is easier to work with them otherwise if you do not repay this, then it would be taken as a lump sum by the state taxing authority or the IRS. I totally understand your concern since this was a mistake on their part, but the IRS and state taxing authority are more concerned with collecting the money owed than who made the mistake.

Customer: replied 10 months ago.
I'm sorry, maybe I was not clear enough about the situation because that response did not answer my question or tell me what I did not already know.I understand I owe taxes - I earn an income, so that goes without saying. So maybe I didn't explain the situation in enough detail.As a state employee, my paycheck is actually issued by the comptroller, not the institution I work at. When I load my pay stubs through the institutional website, I see no deduction for Medicare and Social Security. When I access my pay stubs with the comptroller, the deduction is there. So at present, for all intents and purposes, to the best of my understanding, the state and the federal government have received tax payments from me, so that is not the issue.My employer is responsible to deduct Medicare and Social Security fees from my paycheck to where they pay half and I pay half (50/50) of what is due based on what I am paid. (This may be unique to my job and/or state, I don't know.) However, by clerical error, they did not. So the letter is informing me that they will pay 100%.But they continue by saying that now I have to pay them 'back' for what is considered my half. They are instructing me that I have to write a check to the institution I work for, not to the state, nor to the Federal government.My issue is -- which may not have been as clear before -- I am being ask to issue a check to the institution where I am employed, not to the comptroller of the State who writes my checks, nor to the Federal government who collects the taxes.I renew my question which is how can I be compelled to pay my employer for this mistake that they made and what (if any) reasonable penalty might I incur if I do not?
Customer: replied 10 months ago.
Sorry - correction."When I load my pay stubs through the institutional website, I see no deduction for Medicare and Social Security. When I access my pay stubs with the comptroller, the deduction is there. So at present, for all intents and purposes, to the best of my understanding, the state and the federal government have received tax payments from me, so that is not the issue."I was looking at pay stubs for 2016, not 2015. The deductions were, in fact, not taken from 2015, so they would not have received payments for Medicare and Social Security from me for that year. However, the letter states:"The state [...] has informed us they will charge [the institution] for your portion of the 2015 FICA taxes and a corrected W-2 (W-2c) for tax year 2015 will be generated and sent to you. [...] IRS regulations require the employer to collect the 2015 taxes from the employee. [Select a payment plan, and issue your checks with "Reimburse FICA" in the memo line to our institution.]"
Expert:  Asad Rahman replied 10 months ago.

So clearly some error took place and they are trying to comply with the regulations retroactively.