Overwithholding(redirected from Over-Withholding)
Deducting and paying too much tax that may be refunded to the taxpayer or applied against the next period's obligation.
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A situation in which an employer withholds too much money from an employee's paycheck and gives the funds to the tax agency. This occurs when the employee does not make enough to qualify for the tax bracket used on the paycheck, or when the employee takes enough itemized deductions for which the withholding does not account to reduce his/her tax liability. Overwithholding usually results in a tax refund or in the application of the amount to next year's taxation.
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