Withholding records a tax department could not verify.
New York measured a 10% exception rate for filers whose payroll ran through the largest payroll providers, against 5.7% for employers filing on their own. An exception means the withholding on the worker’s return did not match what the provider reported to the state, or the record was missing data. The report notes that a provider’s error usually surfaces at tax time, not on the paystub.
NY Department of Financial Services, payroll service provider report, September 8, 2022