This is a significant payroll compliance issue that needs immediate attention. As others have confirmed, FUTA (Federal Unemployment Tax Act) is absolutely an employer-only tax - there is no scenario where this should be deducted from your paycheck as an employee. Here's what I'd recommend for your next steps: 1. **Gather evidence first** - Collect all paystubs showing this deduction and calculate the total amount incorrectly withheld 2. **Approach HR/Payroll professionally** - Present this as a compliance issue that needs correction, not just a personal complaint 3. **Reference IRS regulations** - Mention that FUTA is covered under IRC Section 3301 as an employer tax exclusively 4. **Request a timeline** - Ask for specific dates when they'll investigate, correct the error, and process your refund 5. **Document everything** - Follow up meetings with emails summarizing what was discussed If they're unresponsive or refuse to fix it, you can escalate to your state Department of Labor or file a complaint with the IRS. Most employers will want to resolve this quickly once they understand the compliance implications. The fact that this appeared after a recent payroll system change (as you mentioned in another comment) suggests this could be affecting multiple employees, which makes it even more urgent for them to address.

As someone who's dealt with payroll compliance issues professionally, I can tell you that employers face several serious consequences for incorrectly withholding FUTA from employee wages: **IRS Penalties:** - Failure to deposit penalties (can range from 2% to 15% of the unpaid tax) - Trust fund recovery penalties if the IRS determines willful non-compliance - Interest charges on incorrectly handled tax amounts - Potential audit triggers that could expose other compliance issues **Department of Labor Actions:** - Wage and hour investigations - Required back-pay calculations with potential interest - Mandatory compliance reviews of entire payroll system **Legal Exposure:** - Class action potential if multiple employees are affected - State wage and hour violation penalties - Possible employee lawsuits for wage theft (since this is essentially taking money that legally belongs to employees) The key point is that FUTA errors aren't just "oops" moments - they represent fundamental misunderstanding of federal tax law. When you approach HR, you can mention that the IRS considers improper employee withholding of employer-only taxes as a serious compliance violation that requires immediate correction and documentation. Most employers will move quickly once they understand this isn't just about fixing one person's paystub - it's about avoiding potential regulatory action that could cost them far more than just issuing refunds.

Based on my experience implementing GSA per diem changes at several organizations, I'd recommend going with your third option - creating your own reduced rates based on the FY2025 GSA rates. This gives you the best balance of compliance, cost control, and administrative simplicity. A few additional considerations for your implementation: 1. **Documentation is critical** - Whatever method you choose, make sure your policy clearly states the calculation methodology and effective dates. This protects you during audits and ensures consistent application. 2. **Communication strategy** - Roll out the changes with clear guidance to employees about which rates apply where. Consider creating a simple reference guide or updating your expense system to automatically apply the correct rates by location. 3. **Monitor actual costs** - After implementation, track whether your reduced rates are creating hardship for employees in certain markets. You might find you need to adjust specific high-cost locations upward while keeping most others at your reduced rate. 4. **Plan for next year** - Set a calendar reminder to review and update rates when the FY2026 GSA rates are released. Having a documented annual process will make future transitions much smoother. The key is picking a sustainable approach that your finance team can manage long-term without creating compliance risks or employee dissatisfaction.

Great thread! As someone who just went through this exact transition at our mid-size company, I wanted to share what worked for us. We initially tried the flat rate approach but quickly realized it wasn't fair to employees traveling to high-cost areas. We ended up implementing a three-tier system based on the FY2025 GSA rates: - Tier 1 (Low cost): 90% of GSA rate ($61 vs $68) - Tier 2 (Medium cost): 85% of GSA rate (varies by city) - Tier 3 (High cost): 95% of GSA rate for places like NYC, SF, DC This gave us meaningful cost savings while still being reasonable for employees. The key was being transparent about our methodology and getting buy-in from department heads before rolling it out. One unexpected benefit - having our own structured rates actually made expense reporting easier for employees since they didn't have to look up constantly changing GSA rates. Our system just tells them the rate based on their destination. The implementation took about 6 weeks total including policy writing, system updates, and employee training. Worth noting that we grandfathered any trips already approved under the old rates to avoid confusion.

For military families in your situation, here are some important points to consider: • Military BAH (Basic Allowance for Housing) is not taxable income but does count toward support calculations for HOH status • If you lived in on-base housing, special rules may apply for determining "cost of keeping up a home" • The Service Members Civil Relief Act provides certain protections but doesn't directly impact filing status • If your spouse was deployed to a combat zone, there may be additional tax considerations • State of legal residence vs. physical residence can impact state tax obligations • The stimulus payments from previous years should have gone to whoever claimed the children Documenting your separate living situation is crucial in case of audit. Keep records of separate addresses, utility bills, etc.

I went through this exact situation during my divorce process! The military separation aspect definitely adds complexity, but you're on the right track thinking about Head of Household status. A few things that helped me navigate this: **Documentation is everything** - Keep detailed records of all your household expenses (mortgage/rent, utilities, groceries, childcare, etc.) to prove you're paying more than half the costs. I created a simple spreadsheet tracking everything month by month. **The timing matters** - Since you've been separated for 11 months, you easily meet the "spouse didn't live in home for last 6 months" requirement. Just make sure your husband's official address reflects his actual living situation. **Consider the bigger picture** - While splitting the kids 2-1 might seem fair, run the actual tax calculations. Sometimes one parent claiming all children while the other files MFS results in the lowest overall tax burden for the family, which you could then split the savings. **State taxes matter too** - Don't forget to factor in how your filing status affects state taxes, especially if you and your husband have different state residencies due to the military situation. The HOH route saved me about $2,800 compared to MFS. Definitely worth exploring, but I'd second the advice about getting professional help given the military complications. A good tax preparer familiar with military situations will pay for themselves.

I just want to add something that might help speed up your ITIN application process. When I applied for my ITIN last year for a similar situation, I discovered that you can actually submit your W-7 application through an IRS-authorized Certified Acceptance Agent (CAA). The big advantage is that CAAs can review your original documents (like your passport) and then submit certified copies to the IRS, so you don't have to mail your actual passport to the IRS. This eliminates the risk of losing your passport in the mail and can sometimes speed up processing since the IRS trusts the CAA's document verification. You can find a list of CAAs on the IRS website - many are accounting firms or tax preparation services that specialize in helping foreign nationals. Some even offer virtual services where you can video call to show your documents. Also, once you get your ITIN and submit the 8822-B, make sure to keep copies of everything and send it via certified mail. The IRS can take 4-6 weeks just to process the responsible party change, and having tracking helps if you need to follow up.

I went through this exact process about 6 months ago when I bought a Delaware LLC as a non-resident. Here's what I learned that might save you some time: The ITIN route is definitely the correct path, but there are a few things that can trip you up. First, when you file the W-7, make sure to check the box for "Exception 1(a)" which is specifically for non-resident aliens who need an ITIN for tax treaty benefits or to claim refunds. This helps the IRS understand why you need the ITIN. Second, I'd strongly recommend getting a US-based tax attorney or CPA involved from the start. They can handle both the ITIN application and the 8822-B submission as your authorized representative. This was worth every penny for me because they knew exactly what documentation to include and how to present everything properly. One more thing - while you're waiting for the ITIN, make sure the company's business address with the IRS is updated to an address where you can actually receive mail (or have someone receive it for you). I made the mistake of leaving the previous owner's address on file and almost missed some important notices. The whole process took about 10 weeks for me from start to finish, but it was much smoother having professional help. Good luck!

I've been dealing with similar EIN applications for complex entity structures in my accounting practice, and I want to add a few practical points that might help streamline your process: **Document preparation tip:** Before filling out Form SS-4, gather all the relevant documents (trust agreements, LLC operating agreements, etc.) and highlight the key sections that define ownership and trustee authorities. This makes it much easier to complete the form accurately and helps if the IRS asks for clarification later. **For the grantor trust LLC:** When using the online application, I've found success by being very concise in the explanation fields. Something like "Disregarded entity of grantor trust - grantor is tax owner" usually works well. The online system seems to handle shorter explanations better than lengthy ones. **Timing considerations:** If you need the EINs urgently for bank account opening, consider applying for the grantor trust LLC online first (since that's typically faster) while simultaneously mailing the paper application for the non-grantor trust LLC. This way you can start some of your banking setup while waiting for the second EIN. **Follow-up strategy:** When calling to check on paper applications, have your complete mailing details ready (date sent, certified mail tracking number, etc.). The IRS representatives can locate applications much faster with this information, and you'll get better service. One last suggestion - keep detailed notes throughout the process. These entity structures tend to come up again for amendments, additional entities, or tax questions, and having a clear record of exactly how you handled the initial EIN applications saves time later.

I just successfully completed this exact process for two LLCs with complex ownership structures, and I wanted to share what finally worked after several failed attempts. The key breakthrough was understanding that Form SS-4 has two completely separate requirements that often get confused: (1) the administrative "responsible party" requirement (must be an individual for IRS contact purposes), and (2) the actual tax ownership structure (determines how the entity is taxed). These don't have to be the same! **For your grantor trust LLC:** Since grantor trusts are tax-transparent, you (the grantor) are already considered the tax owner. List yourself as the responsible party in Part 3, then put the trust details in Part 7a. The online application actually works well for this scenario - just select "Other" for entity type and briefly explain "Disregarded entity of grantor trust." **For your non-grantor trust LLC:** Paper form is definitely the way to go. List an authorized trustee as the responsible party in Part 3, trust info in Part 7a, and in Part 9 add a simple explanation like "LLC owned by [Trust Name] and will be treated as disregarded entity for tax purposes." Pro tips that saved me time: Use certified mail for paper applications, call the Business & Specialty Tax Line (800-829-4933) after 2-3 weeks to confirm receipt, and keep copies of everything since they sometimes ask for clarification during processing. The whole process took about 3 weeks for my paper application and 10 days for the online one. Don't let the confusing instructions discourage you - once you understand what they're actually asking for, it's much more straightforward than it appears!