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If finance person mistakenly submits wrong withholding for payroll, extra 200 taken out of my check can I ask the employer to reimburse me? The withholding exemptioms were wrong when submitted.

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    This almost certainly will depend on the jurisdiction. Where exactly are you located? In general, though, yes. You can ask. Whether or not you can legally compel them to correct the error will depend on the laws. – ChrisInEdmonton Jan 24 '14 at 20:30
  • More likely, you can ask for a one time -200 from next check. Far easier than to undo what's been done. – JTP - Apologise to Monica Jan 24 '14 at 20:33
  • work for a non-profit agency in NC. Thanks for help, glad I caught mistake however I am short $200 due to director's mistake. – Sceia Jan 24 '14 at 20:51
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Ask the company if they can make an adjustment for the next paycheck. If they can't then do the following:

Increase the number of Federal exemptions by 1. In 2014 a personal exemption reduces your apparent income by $3950.

  • If you are in the 10 % tax bracket and you are paid every two weeks you will see the amount of taxes withheld drop by ($3950*0.10/26) or ~$15. The 13 Paychecks later change it back.

  • If you are in the 15 % tax bracket and you are paid every two weeks you will see the amount of taxes withheld drop by ($3950*0.15/26) or ~$23. Then 9 Paychecks later change it back

  • If you are in the 25 % tax bracket and you are paid every two weeks you will see the amount of taxes withheld drop by ($3950*0.10/26) or ~$38. Then 5 paychecks later change it back.

Remember the money isn't gone, it has just been transferred prematurely to the federal treasury.

You could also wait until you complete your taxes this spring, then see if you needed to make an adjustment to your exemptions. If you normally get a large refund then you should be increasing your exemptions anyway. If you are always writing a check to the IRS then you weren't getting enough withheld.

Also make sure that payroll has the correct numbers. Most companies include the number of federal and state exemptions on the paycheck stub, or the pdf of the stub.

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That $200 extra that your employer withheld may already have been sent on to the IRS. Depending on the size of the employer, withholdings from payroll taxes (plus employer's share of Social Security and Medicare taxes) might be deposited in the US Treasury within days of being withheld. So, asking the employer to reimburse you, "out of petty cash" so to speak, might not work at all. As JoeTaxpayer says, you could ask that $200 less be withheld as income tax from your pay for the next pay period (is your Federal income tax withholding at least $200 per pay period?), and one way of "forcing" the employer to withhold less is to file a new W-4 form with Human Resources/Payroll, increasing the number of exemptions to more than you are entitled to, and then filing a new W-4 changing your exemptions back to what they are right now once when you have had $200 less withheld. But be careful. Claims for more exemptions than you are entitled to can be problematic, and the IRS might come looking if you suddenly "discover" several extra children for whom you are entitled to claim exemptions.

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    Changing exemptions isn't going to flag you for an audit. Under-withholding has its own penalty at filing time. – NL - Apologize to Monica Jan 24 '14 at 23:05
  • @NathanLiddle I didn't claim that an audit of the tax return can occur (and yes, under-withholding has its own penalty) but employers are entitled to question (and I suspect also report to the IRS) if an employee suddenly files a W-4 with 16 exemptions, say. A common dodge among those who believe that the income tax is illegal or unconstitutional is to file W-4 forms with huge numbers of exemptions so as to reduce the withholding to 0 (and later, file a frivolous return saying no tax is due), and the IRS is very definitely on the look out for that. – Dilip Sarwate Jan 25 '14 at 0:01

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