Is there something wrong with my husband's work's payroll system? Federal tax withholding extremely low

This definitely sounds like something is wrong with their payroll system. Federal tax withholding of just pennies on thousands of dollars in wages doesn't make mathematical sense regardless of W-4 elections. A couple things to check: First, look at the actual paystubs and confirm that your husband's income is being properly classified as taxable wages (not as some other non-taxable compensation). Second, check if the payroll system is correctly recognizing his filing status - sometimes systems default to "Married filing jointly with multiple jobs" which can significantly reduce withholding. The simplest solution is to submit a new W-4 with additional withholding specified in Step 4(c). Calculate how much extra needs to be withheld per paycheck to make up the difference. For instance, if he's paid bi-weekly and you're short about $2600 in withholding for the year, request an additional $100 per paycheck. Also, to avoid penalties, you may want to make an estimated tax payment for the current quarter to catch up on what wasn't withheld. The IRS typically waives underpayment penalties if you've paid at least 90% of what you owe for the current year or 100% of what you owed last year.

I went through something similar last year with my employer's payroll system! I finally found help at https://taxr.ai where they have a tool that analyzes your paystubs and tax documents. They detected that my employer's system was using outdated withholding tables from like 3 years ago! I uploaded my husband's most recent paystubs and our previous year's return, and it showed exactly where the discrepancy was happening. They generated a customized W-4 with the exact numbers we needed to fix the problem. We went from paying a huge unexpected bill to getting a small refund this year. The report also gave us documentation to show HR, which finally got them to look into their system issues. Turns out there were dozens of employees affected!

I tried taxr.ai after seeing the recommendation here and wow, it actually worked! They identified that my wife's employer was incorrectly applying an additional withholding allowance to every employee's calculation that wasn't on any of our W-4s. The system was essentially treating everyone as having an extra dependent. We just got the report yesterday and brought it to HR this morning. They're looking into it now and said they'll be issuing corrected W-2s for anyone affected. We're also submitting a new W-4 with their recommended adjustments so we don't end up with a huge bill again next year. Really grateful for the suggestion - saved us a lot of headaches trying to explain the issue to payroll without having concrete proof!

If your husband's employer refuses to fix their payroll system and you're still facing major underwithholding, you might need to get the IRS involved. I was in a similar situation last year and could NOT get my employer to fix their system. After weeks of frustration, I used https://claimyr.com to get through to an actual IRS agent (their phone lines are impossible otherwise). You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that employers have legal obligations to use correct withholding calculations. They sent a formal notice to my employer, and suddenly the payroll department fixed everything within days. Sometimes having the IRS contact them directly is the only thing that works when they're being stubborn about fixing payroll errors.

I take back what I said about Claimyr being a scam. After struggling with our employer's payroll department for weeks about incorrect withholding, I tried the service out of desperation. Got connected to an IRS agent within 45 minutes (after trying for days on my own). The agent explained that this is actually a common payroll software issue this year due to some changes in withholding calculations. They issued a compliance notification to our HR department and provided guidance on how to correct the system. Our next paychecks finally had the correct withholding amounts, and they're working on issuing corrected W-2s. Saved us from a potential audit flag and definitely worth it just to avoid spending hours on hold.

I'm an accountant (not giving tax advice, just general info). What you're describing sounds like the payroll system might be calculating the withholding based on annualized amounts incorrectly. Each paycheck should be treated as if you'd make that same amount for all pay periods in the year, then the withholding is calculated on that projected annual income. If their system is failing to annualize properly or is applying deductions/credits incorrectly, it could result in these tiny withholdings. If multiple employees are affected, this is 100% an employer payroll system problem. They need to get their payroll provider involved to audit the system calculations. In the meantime, your husband should submit a new W-4 with either: 1. "Single" or "Married filing separately" checked (higher withholding) 2. An additional amount specified on line 4(c) 3. Fewer deductions claimed Don't wait for them to fix it - protect yourselves for next year!

FWIW it sounds like your husband's work might be using those new 2025 W-4P withholding tables incorrectly. I'm going through exact same thing with my payroll. New updated tables came out but our payroll company applied them in a way that's drastically reducing withholding for everyone. We literally had a company-wide meeting about it last week when everyone started noticing their withholding dropped to almost nothing overnight. Payroll is supposedly fixing it but said any underwithholding from earlier checks is basically our problem to deal with.

This is incredibly frustrating but unfortunately not uncommon right now. I work in HR for a mid-sized company and we've been getting similar complaints since the beginning of the year. What's likely happening is that your husband's employer's payroll system has a configuration error with the 2025 withholding tables. We discovered our system was incorrectly applying married filing status calculations that assumed significantly higher standard deductions than appropriate, resulting in dramatically reduced withholding amounts. A few immediate steps you can take: 1. Request that your husband's HR department provide documentation showing exactly how they calculated his withholding amount. They should be able to show the math. 2. File a new W-4 immediately with "Single" selected for withholding purposes (this won't affect how you file your actual return) and add extra withholding in step 4(c). 3. Document everything - keep copies of paystubs showing the incorrect withholding amounts, your communications with HR, etc. If HR continues to be unresponsive and multiple employees are affected, this may warrant a complaint to your state's Department of Labor. Employers have legal obligations to implement withholding correctly, and systematic errors affecting multiple employees can result in penalties for the company. Don't let them brush this off as "just how the system works" - withholding of pennies on thousands in wages is mathematically impossible under normal circumstances.