State Witholdings - Too little withheld for an individual

What is my responsibility for this? I have an employee who completed a W-4 for single, and claiming "0" . She is currently very concerned as tax season arrived and she now realized she owes a lot to state. She took a look at her paycheck withholdings and for some reason our payroll company seems to have been taking out only about 1/2 of what the EDD's standard recommends. According to BLR we should be deducting based on the EDD bracket or the exact calculation method. Either way I do understand the tax would still be owed (and so does she) but what does this mean overall - other than she owes a lot and wasn't expecting that? We never issued to our employees the state form for withholding, but have based it off the W-4.


  • 2 Comments sorted by Votes Date Added
  • It doesn't mean alot except if she is hit with a penalty for underpaying. She should have noticed that she wasn't having enough withheld much earlier. On the other hand, the mistake was not hers. Someone should make her whole if she has to pay a penalty or if she has to borrow to pay her taxes. I think that a good payroll company would be willing to cover the expenses resulting from their mistake.
  • Thanks. I don't think she was penalized but may have had to borrow money to pay it. I'm waiting for the payroll company to finish troubleshooting the issue before I go back to her with any options we may have to help out.
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