What are the consequences of failing to pay payroll taxes?

When you get your paycheck in Pennsylvania, you will note that money has been taken from it to pay taxes. This is a legal requirement. Your employer must take these taxes from your pay unless you are an independent contractor. If your employer fails to take payroll taxes, it can cause trouble for your employer and you.

According to the IRS, employers not only have to keep your portion of the payroll taxes but also must pay their share of these taxes. An employer must report all of your earnings and the taxes withheld on those earnings to the IRS. The taxes withheld must be put into an approved bank account. If your employer fails to do any of these things, it could face civil and criminal charges.

If your employer does not withhold taxes when required to do so from your wages, it does not mean you do not have to pay them. You are ultimately responsible for paying the payroll taxes. So, if your employer does not withhold them, you must pay them when you do your taxes each year. You can report your employer for not withholding taxes, though, without fear of retribution for doing so.

Payroll taxes monitored by the IRS are those at the federal level. They include Medicare and Social Security. State taxes are managed by the state in which your employer is located. School taxes may also be handled by the state, but local taxes are typically handled by the city. Issues with withholding those taxes should be taken up with the proper managing agency. This information is for education and is not legal advice.

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