R33. Employer Considered as Trustee  

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  • A. Every employer is deemed to be a trustee for the Municipality in collecting and holding the tax required to be withheld, and the funds so collected by such withholding are deemed to be trust funds.

    B. Every employer required to deduct and withhold the tax at the source is liable directly to the Municipality for payment of such tax whether actually collected from such employee or not.

    1) Prior to the issuance of Form W-2, if an overpayment of the amount of tax required to be deducted is withheld from the employee's pay the excess shall be refunded by the employer to the employee.

    2) If an over-withholding of tax is not discovered until the following year, the employee shall claim the overpayment by filing a return and providing an explanation of the circumstances causing the overpayment. Upon review and acceptance of the documentation submitted by the employee, the tax commissioner shall refund to the employee the amount of such excess withholding.

    3) If less than the amount of tax required is deducted and withheld by the employer in any pay period or periods, the employer must remit the additional payment. The deficiency may be deducted from the employee's wages in subsequent pay periods.