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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7268
Experience:  15years with H & R Block. Divisional leader, Instructor
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I am about to receive a back pay award or settlement from previous

Resolved Question:

I am about to receive a back pay award or settlement from previous employer. This is the final payment of 2. The first payment, they use single as my withholding status which obviously more taxes was taken out. But my withholding status is married and claiming exempt even while I was employed by them. I informed my lawyer to have them correct it before the last payment check is issued. But my employment lawyer tells me he doesn't know because he is not a tax lawyer. They will send me a w2 by end of the year. Pls help
Submitted: 11 months ago.
Category: Tax
Expert:  Robin D. replied 11 months ago.

Robin D. :

Hello and thank you for using Just Answer,
The past employer is to treat back pay as wages in the year paid and withhold and pay employment taxes as required. You would not be allowed to claim exempt form withholding. To qualify for exempt status, the employee must have had no tax liability for the previous year and must expect to have no tax liability for the current year.
If the employer knows the withholding is incorrect then they are to use the single status. You could complete a W4 for the ex employer and request either married or married but withhold at the higher single rate. If the time they receive the W4 and the pay out are not close then the change could be made to reflect the correct amount for status and number of allowances.

Robin D. :

Yes you will receive a W2 at year's end and all the tax withheld will be credited to you on your tax return when you file.

Robin D. :

If you were truly exempt from withholding (based on the rules for that above I mentioned) then you would have needed to give them a W4 a new Form W-4 claiming exempt status by February 15 of the year. So if you are really under exempt status the ex employer will most likely tell you that they cannot change that now as the date has passed and by law they are required to use single.

Robin D. :

I wish I could tell you differently as everyone wants the use of their money during the year but you will receive any overpayment for tax when you file and show the refund amount.

Robin D. :

I sincerely XXXXX XXXXX knowing you will receive a refund for the extra tax withheld is some comfort.

Robin D. :

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Robin D. :

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Robin D. :

Please be sure and view the full answer in Q&A.

Expert:  Robin D. replied 11 months ago.
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Expert:  Robin D. replied 11 months ago.
I switched to regular Q&A and here is a copy of my full post to you:
Robin D. : Hello and thank you for using Just Answer,
The past employer is to treat back pay as wages in the year paid and withhold and pay employment taxes as required. You would not be allowed to claim exempt form withholding. To qualify for exempt status, the employee must have had no tax liability for the previous year and must expect to have no tax liability for the current year.
If the employer knows the withholding is incorrect then they are to use the single status. You could complete a W4 for the ex employer and request either married or married but withhold at the higher single rate. If the time they receive the W4 and the pay out are not close then the change could be made to reflect the correct amount for status and number of allowances.
Robin D. : Yes you will receive a W2 at year's end and all the tax withheld will be credited to you on your tax return when you file.
Robin D. : If you were truly exempt from withholding (based on the rules for that above I mentioned) then you would have needed to give them a W4 a new Form W-4 claiming exempt status by February 15 of the year. So if you are really under exempt status the ex employer will most likely tell you that they cannot change that now as the date has passed and by law they are required to use single.
Robin D. : I wish I could tell you differently as everyone wants the use of their money during the year but you will receive any overpayment for tax when you file and show the refund amount.
Robin D. : I sincerely XXXXX XXXXX knowing you will receive a refund for the extra tax withheld is some comfort.
Robin D. : The system showed JACUSTOMER-pvfb5oxp- has entered this chat! 4:37 PM

JACUSTOMER-pvfb5oxp- has stepped out of this chat. 4:37

Robin D. : That generally means you are having difficulty viewing in the CHAT mode.
Robin D. : I can change us to regular Q&A but we will not be able to CHAT in real time.
Robin D. : Please be sure and view the full answer in Q&A.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7268
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 3 other Tax Specialists are ready to help you
Customer: replied 11 months ago.
Thank you
Expert:  Robin D. replied 11 months ago.
You are most welcome.
It is unfortunate your lawyer cold not have advised you sooner so you could correct the withholding but at least you will be able to receive the refund of any amount that is withheld over your true tax when you file your return.

I really enjoyed working with you – please feel free to request me again when you come back to ask another question.
You will find the request feature when you come back under your MY QUESTIONS section.

Your positive rating is always thanks enough.

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