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Employers are required by law to withhold employment taxes from their employees. Employment taxes include federal income tax withholding and Social Security and Medicare Taxes.

Some reasons why your employer did not withhold federal taxes (or even state taxes):

1. If you’re considered an independent contractor, there would be no federal tax withheld from your pay. In fact, your employer would not withhold any tax at all. If this is the case:
   • You probably received a form 1099-MISC instead of a W-2 to report your wages. No Medicare or Social Security would have been withheld either.
   • You’ll need to file a Schedule C to report the income and any expenses related to that income.
   • You’ll also need to file a Schedule SE to report and pay your Medicare and Social Security tax.
2. You might have claimed to be exempt from withholding on your Form W-4. You must meet certain requirements to be exempt from withholding and have no federal income tax withheld from your paychecks. You should check with your HR department to make sure you have the correct amount withheld.
3. Your employer might have withheld taxes but gave you an incorrect W-2. If this is true, your employer must issue you a corrected W-2.
4. Your employer might have just made a mistake. If your employer didn’t withhold the correct amount of federal tax, contact your employer to have the correct amount withheld for the future. When you file your return, you’ll owe the amounts your employer should have withheld during the year as unpaid taxes.

If workers are independent contractors under the common law rules, such workers may nevertheless be treated as employees by statute (statutory employees) for certain employment tax purposes if they fall within any one of the following four categories and meet the three conditions described under Social Security and Medicare taxes, below.

Withhold Social Security and Medicare taxes from the wages of statutory employees if all three of the following conditions apply.

• The service contract states or implies that substantially all the services are to be performed personally by them.
• They do not have a substantial investment in the equipment and property used to perform the services (other than an investment in transportation facilities).
• The services are performed on a continuing basis for the same payer.