The information posted on PayrollTalk is for informational purposes only and is not intended to substitute for obtaining accounting, payroll, tax, or financial advice from a professional accountant.

Employer sponsored health plans in New Jersey

Hello. Please provide some guidance on insurance plans that are completely sponsored by the employer in NJ.
Are they taxable or not?
Thank you!

Comments

  • Taxable to who and taxes for what entity? That's a loaded question...

    do you mean that the employer is paying 100% of the premiums? If the employee is paying part, you would at least need a "Premium Only Plan" under Section 125 for the employee portion to be nontaxable to them.

    But I agree with David. It is very rare for an employer-sponsored health plan to be taxable to either the employer or employee on a federal level. And for me also, your state is not mine so I have no clue as to state or local taxation.

    I suggest availing yourself to the services of an insurance broker (not a carrier) who could help out a bit locally. Generally this would be an HR task/duty rather than a payroll duty unless you are asking about deductions from an employee's paycheck.

  • Yes, the employer is paying 100% of the premiums.
    New Jersey does not follow the Federal guidelines for taxability of insurance. Deductions are not pre-tax for NJ.
    My question is- are both the employee and employer taxed on the benefit?

  • In the end you are asking state specific tax questions....for that you need more than an anonymous payroll forum. But in the end it would surprise me if the deductions (? what deductions if the employer is paying 100%?) were taxable to BOTH the employee AND the employer.

    You really ought to be seeking out a tax professional in your state then rather than this being a vague payroll question. It sounds like you are not even sure what you are trying to ask because do you mean paycheck deductions or business tax deductions?

Sign In or Register to comment.