COLLEGE STATION, Texas (KBTX) – An error in College Stations ISD’s payroll software has left many employees owing hundreds and in some cases thousands of dollars to the IRS.
Several College Station ISD employees had their taxes withheld based on the wrong income brackets.
KBTX is aware of at least 20 staff members that the software problem affected.
Krystal Bridges made changes to her W-4 withholding form in March 2021, she believes this was where the mistake originated for her. Bridges elected to withhold an additional $10 per pay period but only $10 was withheld in total.
To add to Bridge’s frustrations is the length of time she says it took the district to acknowledge that this issue was more widespread than originally thought.
Bridges informed the district’s payroll department of the issue back on Jan. 27. In an email to the payroll department Bridges questioned the amount of tax being withheld.
“We are confused about our W-4 extra withholding forms we filled out in March last year,” said Bridges. “All of our federal withholdings have gone done, which will, in turn, make us either owe the IRS or our tax return is significantly less.”
According to emails, the payroll coordinator for the district verified what Bridges assumed and that only the $10 was being withheld.
“Your federal taxes withholding is determined by your W-4. I can see you are claiming married with an annual tax dependant and extra holding of $10. Based on that information, the only federal you have taken from your checks is the $10,” the email stated. “If you feel this is not enough then I can recommend you increase the extra withholding amount.”
Other College Station ISD employees had similar questions for the district based on emails obtained by KBTX.
“Can you please explain to me in what instance my withholding would be $0,” said one employee. “I am not tax-exempt and according to the tax professional I met with, I should be having taxes withheld based on the amount I make. I have never been in a situation in the past (where I have made less than I do now) that I did not have taxes taken from my check.”
The district replied, “I feel quite certain that there is not a glitch in our system or clerical error. The issue you are experiencing has to do with the withholding tables that are generated by the IRS,” the email stated. “According to the tax tables, your withholding maybe $0, therefore the extra would be the only thing that is withheld.”
According to documents, the withholding errors continued into April.
A document from the College Station ISD payroll department dated April 26, 2022, informed employees that the tax tables in the payroll software will be updated and changes would be reflected for payroll occurring the second week of May.
Employees we spoke with say they love their job but this situation is frustrating and costing them money.
“I love my job and I love what I do. I love working with kids. I graduated from the school that I work at. I have a loyalty to it,” said Bridges. “I just don’t think that this particular situation was handled correctly and in the favor of its hardworking employees.”
We reached out to Texas A&M University’s Mays School Of Business Department of Accounting to find out how common situations like these are. Clinical professor Michael Shaub says situations like these are rare and ultimately the taxpayer will be responsible for the tax not withheld.
“The practical thing the employee faces is they still have the liability to the IRS,” said Shaub. “Whoever the employer is may have issues they need to deal with because they’re supposed to have been withholding appropriate tax.”
During our investigation, KBTX learned that this issue wasn’t isolated to College Station ISD. Schools in Florida and Michigan both had similar issues this year.
College Station ISD declined an on-camera interview but released a statement.
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