Since the emolument payments were issued, our office has received many calls from employees inquiring about the tax withholding on their emolument checks. The emolument checks were taxed at the IRS supplemental wage rate of 25%. We have had employees who detailed for us the amount they received, less the 25%, and in each case they believed that the difference was what they were due.
Unfortunately, in performing these calculations most, if not all, forgot to include the fact that the emolument payments were also subject to Social Security tax, Medicare tax and State tax. Once you calculate all with-holdings to which the payment is subject to, it provides a much more accurate picture of what an employee is due. This subject is compounded by the fact that not everyone pays Maryland taxes as many employees live outside of Maryland and their payroll is subject to other jurisdiction’s tax liabilities.
Please consider all tax liabilities as you calculate what you are due in the case of emoluments.