What should I do if I accidentally under-withheld taxes for an employee?

If you accidentally under-withhold South Carolina state taxes for an employee, you should take the following steps:

1. Calculate the Correct Withholding: Determine the correct amount of tax that should have been withheld for the period.

2. Make a Payment to the State: Submit the under-withheld amount to the South Carolina Department of Revenue (SCDOR) as soon as possible. Include it with your next withholding return or as a separate payment if necessary.

3. Adjust Future Withholding: Update the employee’s payroll to ensure the remaining amount is correctly withheld in future pay periods.

4. Document the Correction: Keep records of the adjustment, payment, and any correspondence with the SCDOR for compliance and audit purposes.

Promptly addressing under-withholding helps avoid penalties and interest and ensures that your reporting remains accurate and compliant with South Carolina tax law.