Federal law requires individuals to pay taxes on their income. To ensure collection of individual income taxes, the government requires employers to withhold, and send to the government, a portion of paychecks for certain types of employees. For each of these “W-2” type employees, the employer withholds a calculated part (based on the amount of income and the number of exemptions the employee claims) of each paycheck. The employer holds these withholdings “in trust” and then sends the funds to the government.
