Is this a common practice (legal)
The company does not tax anything. The government does.
They MUST withhold social security tax on the 401K contributions and medicare tax on the 401K contributions. This is not optional. They cannot have a 401K without there being social security tax on the 401K contributions and medicare tax on the 401K contributions.
There should be no federal income tax on the 401K contributions.
Most states also don't have state income tax on the 401K contributions, but I'm not sure about Nevada specifically.
Ask at HR or payroll to explain why your contributions are taxed. Did you opt to have taxes paid on the 401k contributions, or did you choose a Roth 401k?
Your state has no income tax and does has no effect on how your 401k contributions are taxed.
Sounds to me like you have a Roth 401k. They are taxed.
Is it common?? Yes it is for Roth 401k's. Did you not read the paperwork that came with your 401k??
For some taxes, ss and medicare, and maybe state. They should not be taxing it for federal income tax.
401K contributions should be deducted from your pay amount BEFORE taxes are calculated.
then it is not a 401(K)
must be a ROTH IRA then