dmertz
Level 15

Retirement tax questions

I understand from your other posts that what they did was take some of what they withheld from your pay for federal taxes and reallocate that to Social Security and Medicare taxes.  Yeah, that seems improper because it disagrees with the federal tax withholding required based on the W-4 that you provided to them and might also be less than 22% default withholding on supplemental wages.  (Either method of calculating withholding on supplemental wages is permitted.)  This could potentially subject you to a federal tax underpayment penalty by having insufficient federal tax withholding.