The employer can withhold the previously underwithheld
amounts from any other compensation belonging to the
employee that is in the control of the employer - whether or
not such compensation constitutes "wages." See Reg. Section
31.6205-1(b)(3).

As an aside, in the case of underwithheld income tax, the
employer can do this subsequent withholding only within the
same calendar year. Note, this limitation does not apply to
underwithheld FICA tax.

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- quote -

and then fire him. who needs a PITA employee?

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123go wrote:
- quote -

Give him a W-2, with the uncollected Medicare tax shown in
Box 12 and coded as N or B.

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rick++ wrote:

- quote -

You may have missed it in the OP, but the poster is NOT
covered by Social Security and does not have to qualify for
such benefits.

Actually, SS requires 40 quarters of work, subject to a
limit of 4 quarters per year. Those 4 quarters could all be
credited in the first three months of the year, as they are
earned income based.

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hnsl <hnslunsford[at]bellsouth.net> wrote:
- quote -

And we're still pretty wild out here.

- quote -

Ah, yes. The IRS golden rule: Get their gold. Period.

Stu

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"Herb Smith" <smithff33[at]aol.com> wrote:
- quote -

I agree, but what happens if the employee quits right now?

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You will have two less years of medicare credit in your
social security account.

You need ten years to qualify for normal retirement.
Less for disability and certain conditions.

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- quote -

Maybe so. But while the instructions for the W-2 form say N
is for uncollected Medicare on excess life insurance, N can
and is used for other uncollected medicare.

For example, we have lots of clients who retired from
general Motors and receive an imputed income for the GM
Retirees Legal Services plan. This plan gives GM retirees
access to lawyers for a host of reasons, at low or no cost.

It resembles cost of group life insurance in that it is
impouted income, and is reported as M & N.

And while N is usually for previous empoloyees, if we can
find another Lee Iaccocco who is willing to work for
$1/year, I would guess his W-2 would have to have M,N on it
too :^)

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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Stuart A. Bronstein wrote:
- quote -

This method of making the recipient responsible for the
Medicare and social security tax is usually applied to those
retirees for whom the employer is still paying things like
life insurance, medical insurance premiums (I think).
These so called "bridge" plans apply from employee's
retirement until normal and early social security age, about
62.

ChEAr$,
Harlan

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Stuart A. Bronstein wrote:
- quote -

Perhaps it is, for those on the "left" coast. After all,
the wild wild west was settled by those "wild" easterners
who couldn't make it on the "right" coast. (grin)

Besides, the version I mention applies to the IRS, whereas
the second would not.

ChEAr$,
Harlan

==========
Moderator:
Harlan, ni amigo: damnyankees are always fair game for
mocking, but left coasters?

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Arthur Kamlet wrote:

- quote -

Art, I see where you are going with this, but wouldn't the
"B" code be more appropriate than "N"? Neither is totally
correct, but the N code is for uncollected Medicare taxes on
excess life insurance premiums (previous employees).

I still feel that the employer has the right (and
obligation) to withhold the tax - even if it is late. It is
the employee's responsibility to pay the tax.

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Arthur Kamlet wrote:

- quote -

Now that's the best idea I've heard yet. Kudos, Art.

ChEAr$,
Harlan Lunsford, EA n LA

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kamlet[at]panix.com (Arthur Kamlet) wrote:

- quote -

I don't think so. That's a big reason for the problem with
independent contractors - employers would rather not
withhold the tax and pass it on to the employee. If it were
so easy to do, classifying someone as an independent
contractor wouldn't be a big deal.

Stu

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Harlan Lunsford <hlunsford[at]bellsouth.net> wrote:

- quote -

I thought it was,

"Get the other guy's gold before he gets yours."

Stu

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Steve Pope wrote:

- quote -

Maybe if you were the employer, you would treat the matter
as you think it should be.

However, the vast majority of employers play by what we
call The Golden Rule.

"He who has the gold, makes the rules."

ChEAr$,
Harlan Lunsford, EA n LA
Wed Aug 2, 2006

==========
Moderator:
Harlan, my main man, Once again you cut to the chase.

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- quote -

If they don't withhold, can they indicate on the W-2 box 12
a notation N - $XXX which suddenly transfers the
responsibility to pay the Medicare tax to the employee?

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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Stuart A. Bronstein wrote:
- quote -

(Grin!)

Are you therefore implying that a thoroughly liberal
employer might take the position like..... "Oh Heck! I
should have withheld tax on that at the time, but ...
golly, gee now, it would be wrong for me to do it now. Oh
well, I'll just eat it."

Not even the Noo Yawk Times would do that, I'll wager.

ChEAr$,
Harlan Lunsford, EA n LA
Wed Aug 2, 2006

==========
Moderator:
Harlan. my main man, I wrote a great commentary on
Liberals and the Noo Yawk Times, but decided if someone
else wrote it, I would have deleted it for political
content - something not allowed here.

So let it suffice to say, you and I are on the same page.

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spope33[at]speedymail.org (Steve Pope) wrote:
- quote -

It's called a set-off. When two people owe each other money,
the amounts can be set off against each other without court
process.

In the employer-employee context it's a bit different, because
laws in some states restrict employers from deducting some
debts from an employee's paycheck. But the concept is valid.

I won't know the specific answer to this without researcb.
But it seems to me that the law requires an employer to
withhold these taxes from an employee's paycheck. So there
should be little problem doing so (in a reasonable way) later
if the employer failed to do it earlier.

Stu

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TxSrv wrote:

- quote -

No.

- quote -

It isn't the case in any state.

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Paul Thomas, CPA <paulthomascpapc[at]bellsouth.net> wrote:
- quote -

I disagree -- they are trying to attach future paychecks for
a back tax. That requires due process. The employee would
be within their rights to not accept such an arrangement.

Steve

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