Federal Insurance Contributions Act (FICA) Penalties

The Federal Insurance Contributions Act (FICA) mandates payroll taxes to fund Social Security and Medicare. If employers fail to withhold, report, or pay these taxes correctly, they can face penalties. These penalties may include additional taxes owed, interest on unpaid amounts, and fines, which can escalate if the errors are deemed intentional or if payment is excessively delayed. It’s crucial for employers to comply with FICA requirements to avoid these financial consequences and ensure their employees receive proper benefits in the future.