CA (california) increased tax rates last year. Today my employer told all of us that they forgot to adjust to the new rates and that the employees will most likely not get a refund this year, but rather might have to pay instead FOR THEIR MISTAKE! Do we have to pay? Doesn't the employer have to give us an amended w-2? Most importantly again do we have to pay for their mistake?

Hi! robl, welcome to AMHD :)

Yes you will still have to pay, your still responsible for the balance no matter or not, that your employer erred.

Your employer could be looking at a big fine, if enough of you filed a complaint to the California State attorney or the tax division.

Sadly though, yes your still responsible for the balance. :(

K

Yes, YOU have to pay. Its your job to make certain that you have the proper deductions.

Why would you need an amended W-2? The one they gave you shows what you made and what they withheld. While they should have withheld more... the information on it is accurate.

Thank you kuxj =]
I won't be getting a refund this year. That money would have helped a lot.

You seem to be arguing that you should not have to pay as much in taxes as other CA citizens because your employer didn't withhold enough throughout the year. Remember that you aren't paying any extra over what you should have been paying all along - it's just that you are paying more as as a single lump sum in 2010 and less of it in 2009 through withholding. It all comes out the same. So no - you are not "paying for their mistake." Of course it's a shock now to realize that you may actually owe money - I get that - but it's not like you've lost anthing here.

Thank you kuxj =]
I won't be getting a refund this year. That money would have helped alot.

First, as you've been told you need to pay the amount of tax owed. If you were under-withheld that matters not. However, if you are subject to any penalty for being under-withheld, then your employer should pay that penalty.

Now, I rarely get much of a refund. Generally I range about $100 Plus or Minus. You do understand that because your employer under withheld that means you had the use of that money during the year. You also understand that the withholding is actually an interest-free loan to Uncle Sam. So the larger your refund, the more money you are loaning Uncle Sam with no return.

I'd rather have the money during the year then get a large refund!

Thanks smoothy, I missed the W-2 angle.

Your welcome robi...

Thanks ebaines, and ScottGem well said.