Author: Jennifer W

I became a U.S. Resident Alien for tax purposes in 2023, which made me subject to FICA (Social Security and Medicare) taxes. My employer failed to update my status and did not begin withholding FICA in 2023.

In 2024, I discovered the error and notified the employer. We agreed that the unpaid FICA would be repaid through paycheck deductions. In February 2025, the employer confirmed the balance would be deducted over 10 paychecks. Deductions began in February 2025 and continued through March 2025.

After March 2025, the deductions stopped. I was not informed that they had stopped.

In September 2025, I relocated to Canada while remaining employed by the same company. I informed them of the move and stated that going forward FICA should not apply since I was living and working in Canada. They responded that 2024 FICA had been paid but that 2025 still needed to be collected. I approved collection for 2025, believing prior years were already handled or properly being deducted.

In October 2025, the employer claimed I owed FICA for 2023–2025 and demanded a lump sum payment of approximately $30,000 USD. When I questioned why 2023–2025 was being charged, they stated that the repayment deductions had been accidentally stopped due to a payroll/pay group system change. They also stated they cannot continue paycheck deductions because I am now in Canada.

The current balance appears to have increased in part due to their failure to maintain the agreed deduction plan and their failure to notify me when deductions stopped.

I have screenshots of all back-and-forth communications with HR on tickets.

Legal Questions.
1. Can the employer demand a lump sum payment when the balance increased due to their payroll/system failures?
2. Does their failure to notify me when deductions stopped create liability or limit their recovery? Can I offer a reduced settlement?
3. ⁠if I cannot get a reduced settlement, do I have the right to reinstate an installment plan?