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Terminated employee paid premium with personal check

We received notice that a FT employee was terminating after they had terminated. This resulted us in only receiving one-half of their premiums for their health, dental and vision payments. Amazingly, they wrote us a check for the half that we paid.

Just trying to think this through,

  1. Would i add this to their yearly totals of deductions. It would show on their w-2. (I'm thinking yes)

  2. Do i deduct it from their taxable gross? (Drawing a blank on this one)

  3. If it's part of their taxable gross, do i owe them some Medicare deduction amount?

  4. Anything else i'm not thinking of?

Thank you,

John

Comments

  • Maybe I am missing something, but Why would you not treat this as you do a reimbursement as a COBRA payment?
  • I am going to suggest that you are overthinking this. It is very hard to have taxable medical coverage. The only two situations I can think of is direct employer payments to Highly Compensated Employees or when the "type" of medical reimbursements is not covered, like maybe face lifts.

    Assuming that you are talking about the employee not paying enough for the medical coverage, we have no taxable transaction unless maybe if the medical coverage was taxable in the first place.

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