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Tax penalty being included with withholding amount

edited November 2008 in Stupid Questions
I am currently experimenting with payroll software and we included some tax penalties and interest and a tax credit with a test company. Now the withholding forms for this test company is showing the tax penalty + interest as part of the withheld payment amount.

I know this is probably a rookie question--but should the tax penalty and interest be included with the withholding payment amount? The software assumes that future liabilities are paid so the tax penalty and interest are showing up with the withheld amount for the total year. However the tax penalty and interest are not showing up in the amount that should be withheld.

Am I making any sense?
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