Your Payroll and Benefits team may be dealing with some disgruntled workers come tax time this year.
Some employees didn’t have enough money withheld from their paychecks last year, as a result of the Making Work Pay tax credit. Result: These employees can end up with either smaller than expected tax refunds — or they could owe the IRS.
Here’s what happened: The Federal tax tables that determine withholding did not account for some of workers whose employment status complicated the tax credit calculation — employees with more than one job, Social Security recipients who still work, etc.
Overall, the Department of the Treasury is estimating that over 10% of taxpayers will end up owing additional taxes.