I received a lump severance payment in the amount of $30K. My former employer miscalculated my deductions by $5K. I have written twice to the employer to see about fixing this mistake with no answer. Do I have any recourse? This took place in NY.

I was terminated by employer but my employment contract provided for a 3-month severance package in the amount of $30K. My employer mailed me the severance check, but it over deducted by over $5K. Now former employer is not acknowledging my emails asking for the mistake to be corrected. Do I have any recourse?

1 answer  |  asked Oct 5, 2018 12:14 PM [EST]  |  applies to New York

Answers (1)

V Jonas Urba
Will you not be entitled to a refund from the IRS? If so what is the harm in waiting a few months to recover the deduction which their payroll service apparently calculated should be withheld?

In New York City it is not unusual to have employers withhold approximately half of a severance payment for estimated taxes, regardless of how much you would normally pay in taxes. Employees recover overpayments from the government at tax time.

If the deductions were not due to estimated taxes but improper benefits or other unauthorized deductions then you should contact the New York State Department of Labor for underpayment of wages owed.

posted by V Jonas Urba  |  Oct 5, 2018 12:25 PM [EST]

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