Because of a state Tax Commission error you could have had between $5 and $120 too much withheld from your first paychecks this year by your employer and sent off to Utah state bank accounts.
All together it could be upward of $9 million of Utahns' pay that was taken from them unnecessarily by the state of Utah. And if you were over-withheld, you won't be getting your cash back for 15 months or so.
State legislative leaders were talking Tuesday about the mistake, and what if anything should be done other than just have the Tax Commission correct it as soon as possible so even more of your salary isn't improperly withheld by your employer.
"It would be so costly to fix it (through some kind of a refund), it's just better to be glad it was caught so quickly, say we're sorry the state is sitting on your $60 or $100 and go forward," said House Speaker Greg Curtis, R-Sandy.
Tax Commission spokesman Charlie Roberts says that the mistake cannot be laid at the door of Utah's new (as of Jan. 1) 5 percent flat-rate tax system. "We change the income tax withholding forms sent to employers each year. This was a calculation error in, at most, 150,000 of those forms."
And employers did nothing wrong in withholding too much of your pay check, they just followed the miscalculated Tax Commission forms.
Still, if your employer withheld too much from your first paychecks this year, no matter how little or much that was, you won't be getting that money back any time soon.
"We will correct the mistake as soon as possible," said Roberts. But without action by the Legislature and Gov. Jon Huntsman Jr., residents won't be getting that money back until they file their 2008 state personal income tax returns April 2009. And you won't be getting interest on whatever was over-withheld, either.
"It makes little sense to spend $4 million or whatever it would be to fix a $9 million problem. It was an honest mistake; no one is gaining personally (in the state) from it," added Curtis.
The mistake was brought to the Tax Commission's attention last week after some individuals noticed more money was withheld from their paychecks than they figured should have been. "Some people check their pay stubs, and we're glad they do," said Roberts.
A quick check found that inaccurate forms were sent to employers affecting as many as 150,000 people who file as married, filing jointly and make more than $8,000 a year. Not all households filing married jointly were affected, he added. "At the tops it's 150,000 (households), but we don't think it will be that many," said Roberts.
The mistakes could be from $2 to $40 a paycheck, with $20 probably being the average in most cases, he added.
Roberts said Tax Commission officials hope to have the problem fixed from 10 days to two weeks.
But at that date, some if not most of those 150,000 poor souls could be in their third two-week pay period.
If 150,000 were affected, at $20 per pay period for three paychecks, that would be $9 million over-withheld from the unfortunate Utahns.
"We don't know exactly what went wrong, but we're going to find out," said Roberts. "We're going to find out exactly who was affected." And then the Tax Commission will decide the best method to adjust the withholding forms and get them to the right employers.
Once the individuals affected are found and the mistake in the formula is figured out, those individuals' employers will get new Tax Commission withhold forms, so the correct withholding will be made from that point on through out the rest of 2008.
But currently no attempt will be made by the Tax Commission to refund or otherwise make those harmed individuals whole except that in April 2009 when each individual income tax payer files their 2008 tax form, those who had too much withheld in early 2008 will either get that much more back in refund or will pay that much less in tax, if tax is due.
Roberts said it is also unknown exactly how much it will cost to fix the mistake, but he believes that can be handled within the Tax Commission's budget."I think once we explain to the (affected) taxpayers," said Curtis, they will understand. "It's unfortunate and not right. If it were a $100 million mistake, then it might make sense" to try a refund. But at this level, it just doesn't, he added.