During my hiring process a few months ago, there was an error in my information delivered to or at payroll. They had thought I was on a student visa and did not have to pay FICA taxes. So that portion of my paycheck was never withheld.

Now that the error has been caught, I've been informed that the taxes due will be withheld from my next few paychecks in installments. I have been prompted to accept the pay deduction and sign an agreement.

I understand that the taxes have to be paid, but the deduction plus the FICA withholding that will now take place are a pretty good chunk of my check. Do I have any options? Am I responsible for their error?

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    How are you damaged? You owe the US government the tax. The error gave you the time value of the money that you weren't otherwise entitled to. – user662852 Dec 11 '15 at 14:24
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    @user662852 Someone living paycheck to paycheck and barely making enough to pay rent/food/bills, who expects each paycheck to be $X, suddenly having to go a month with $X/2 would have significant challenges. Yes, they should've known about the tax and accommodated for it - but what percentage of people in their early 20s know to that degree? I only did because I was a waiter in college (and as a waiter, you make nearly nothing on your check - so every little bit is noticeable). – Joe Dec 11 '15 at 14:25
  • @Joe Ignorance is never an excuse. – SnakeDoc Dec 11 '15 at 20:13

The short answer is that yes, you are responsible for making the FICA taxes whole. Note that you're not being charged anything you weren't already owing; you in fact got to have some of the money ahead of time, so you came out ahead in one sense. But technically, the portion of FICA tax that should be withheld is your responsibility to pay (and their responsibility to withhold).

Now, if you're living paycheck to paycheck this probably doesn't help you feel better about it, and since they didn't find it until the last month of the year, you end up being more short (they're probably trying to catch up by end of year, since each year's tax is separate to some extent).

If this is a burden that is unreasonable, you might ask either your direct supervisor or HR if there is anything they can do to help - whether it is spread the extra withholding out over a longer period of time, or give you an advance on some of your pay, or even just allow you to work some extra hours to make up for it temporarily. There may be many options to help you out here, and since it was their error initially they ought to be at least somewhat willing to work with you.

Also - as noted in comments below, you may see if you can lower your W4 withholding (income tax). Particularly if you are likely to get a refund, you could lower your withholding for the next few pay checks to shift some of that refund to now. Your employer may not be able to do that instantly, but it may be worth asking.

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    Any missing amount will be owed when you file taxes, too. – enderland Dec 11 '15 at 15:33
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    @enderland I was actually curious about that. Yes, it's due then - but does the OP have the option of waiting to make it whole until then? Many young people get tax refunds, particularly if they didn't know to file a W-4 with the right deductions; so for a person who's paycheck to paycheck, that might be a good solution. I don't know however if that's permissible or possible. – Joe Dec 11 '15 at 15:42
  • @Joe Good point about W4 filing - the OP should check their withholding. If they are having more withheld than they need, adjusting to aim for only a small refund may ease the situation a bit. – Patricia Shanahan Dec 11 '15 at 19:32
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    "But technically, the portion of FICA tax that should be withheld is your responsibility to pay (and their responsibility to withhold). Does this mean that the employer has made good the payment to the IRS? Does the OP now owe the feds, or his employer? – DJohnM Dec 11 '15 at 20:00
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    That doesn't parse right to me, particularly since it includes income tax. Your employer is not responsible for income tax. They are responsible for withholding - but it wouldn't lower your personal responsibility for income tax payment. I suppose it might shift the penalties to your employer for under withholding - but I don't even know that I think that would be the case. – Joe Dec 11 '15 at 20:20

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