FICA taxes mistakenly not withheld by employer

Forum|Forum|3 years ago
March 25, 2023
1 reply
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I was a nonresident alien before 2022 but in 2022 I became a resident alien and am now responsible for FICA taxes. My employer however did not withhold the FICA tax from my paycheck. They have sent me a corrected W-2 that shows the correct values for the social security wages and Medicare wages and tips (Boxes 3 and 5) but the amount withheld for both is 0 (Boxes 4 and 6).

Will Turbox tax compute the amount I should pay for the not withheld FICA tax?

Best answer by MonikaK1

No; since you were properly treated as an employee, the employer is responsible for collecting and paying over the FICA taxes. Your personal income taxes will be based on what you report from Form W-2.

If an employer fails to withhold and pay over to the government an employee’s FICA taxes, in either a current or a subsequent year the employer can make an adjustment when the error is discovered to the quarter in which the underpayment occurred.

If the employer discovers the error after the calendar year of the wage payment closes, the employer provides the employee and the Social Security Administration (SSA) a corrected Form W-2 (Form W-2c, Corrected Wage and Tax Statement) reflecting additional FICA earnings for the prior year and FICA tax withholding as if the employer had made it correctly (Regs. Secs. 31.6051-2(c)(a)–(c) and 31.6051-1(c)(1)).

This change to FICA wages and FICA tax withholding generally does not affect the employee’s prior year individual tax return. At this point, the employer has paid the employee’s taxes. The regulations provide a specific remedy to allow an employer to recover from the employee’s pay the FICA taxes that the employer paid on the employee’s behalf (Regs. Sec. 31.6205- 1(d)(1)).

If the employer does not recover the amount from the employee, the payment of the employee's share of FICA tax by the employer is current wage compensation, subject to FICA and income tax withholding, and reflected on the employee’s year-end Form W-2.

See this IRS webpage for more information regarding the employer's options for correcting employment taxes.

Please see this TurboTax tips article regarding employees and FICA taxes.

M

MonikaK1Answer

No; since you were properly treated as an employee, the employer is responsible for collecting and paying over the FICA taxes. Your personal income taxes will be based on what you report from Form W-2.

If an employer fails to withhold and pay over to the government an employee’s FICA taxes, in either a current or a subsequent year the employer can make an adjustment when the error is discovered to the quarter in which the underpayment occurred.

If the employer discovers the error after the calendar year of the wage payment closes, the employer provides the employee and the Social Security Administration (SSA) a corrected Form W-2 (Form W-2c, Corrected Wage and Tax Statement) reflecting additional FICA earnings for the prior year and FICA tax withholding as if the employer had made it correctly (Regs. Secs. 31.6051-2(c)(a)–(c) and 31.6051-1(c)(1)).

This change to FICA wages and FICA tax withholding generally does not affect the employee’s prior year individual tax return. At this point, the employer has paid the employee’s taxes. The regulations provide a specific remedy to allow an employer to recover from the employee’s pay the FICA taxes that the employer paid on the employee’s behalf (Regs. Sec. 31.6205- 1(d)(1)).

If the employer does not recover the amount from the employee, the payment of the employee's share of FICA tax by the employer is current wage compensation, subject to FICA and income tax withholding, and reflected on the employee’s year-end Form W-2.

See this IRS webpage for more information regarding the employer's options for correcting employment taxes.

Please see this TurboTax tips article regarding employees and FICA taxes.

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A

Anonymous4990

Hello,

I am in a similar situation. FICA was not deducted as my residency status changed to resident alien last year. How should I proceed? Is there a way to pay IRS my portion of the taxes myself through DirectPay or through check (Or any IRS Form)?

Or is the Employer route only way to fix this?

T

ThomasM125

There is not a way for you to pay the social security tax. However, you must keep in mind that your social security benefits will be calculated based on your wages, not the tax paid in on them. So as long as your social security wages, as reported in box 3 on your W-2 form, are correct you will not be penalized for having the wrong amount of social security tax paid in.

Also, when the IRS discovers that the wrong amount of social security tax was withheld, they will likely inquire about that with the employer and demand a corrected form be submitted along with a payment of the taxes due.

@Umerkk96

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