Employer is not taking out Federal Taxes When W4 is Submitted

[Antanelle]

Employer is not taking out federal taxes from their employees even though W4s were submitted for them to take the taxes. I will have to owe. How do I get the employer to comply?

[VincentL12345]

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.

[Antanelle]

I'm not a contract and none of those apply. The employer who is a new sole owner of a nursing home is not

taking federal taxes out of none of the staff's pay. Everyone is complaining since the owner bought the nursing home in August. Employees haven't had federal taxes deducted for 3 months. We have complained to the HR with no avail. How do we get the employer to comply?

[DianeW777]

It happens unfortunately.  In order to get your employer to comply, use the form and information below.  It will not handle the past however once the IRS follows up the employer should begin to withhold based on your W-4 (noted below).

• Form 3949-A - Complete this form (click on the form hyperlink), then print and mail to the IRS (address is on the form instruction section).  Be sure to select 'Failure to Withhold Tax' in Section B.  (You can fill it out online or print to complete).

Make sure you complete a new W-4 form for your employer as often as you need to. You are allowed to change this as many times as you need to during the year for any employer.  This form does require a signature.  

The employer is required to use a chart based on your gross wage and whether you are paid weekly or bi-weekly.  This chart determines the amount of withholding required based on your W-4 information. The new W-4 may have confused some individuals so it's important to review the instructions before you complete a new one.  For example:

• Step 3: This section is determining if you will have a child as a dependent and allowing you to keep more of your income during the year which creates a lower amount of withholding and a higher pay check. This also reduces the refund on your tax return.
• Step 4: This section allows you to add an additional amount you want withheld for each pay check.

Whether you must pay or get a refund is calculated based on your overall total income and whether you have any dependents to claim on your tax return such as your child, and many other possibilities for your situation. You can enter your information into TurboTax before you have to pay any fee for the software. This will give you an idea about what your final results will be.

• TurboTax Online (Currently simple returns may be filed free-click the hyperlink on the page to check)

@Antanelle