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imputed income

edited October 2010 in General Payroll Topics
Can someone help me here regarding pretax transit for terminated employees. If I am correct shouldn't the balance of pre tax transit in their account be taxable and reported as imputed income. I am not receiving this info from my HR person and I asked her to request the report from transit with the reminated employees and their balance. Am I correct.



  • Balance in the account is not "imputed" it is actual - imputed means that nothing was paid, but the employee had a benefit - the value of the benefit is imputed income. Where there is money (from deductions - whether pre-tax or post-tax in an account. that had to be actual income at some point. That is, there had to be actual income to generate a deduction from income. An example is where the employer provides life insurance and uses the IRS table to determine the amount to include in the employee's income or where a company provides transportation in the corporate jet to a politician or the company provides a laptop computer to the employee, the employee uses it at home for both business and personal purposes. The value of the personal portion is imputed income.
  • If you are referring to unused funds left in their accounts after termination, that is not taxable to them. You should be able to forfeit it from their accounts. The Sec 132 plan document if you have one (I don't think one is required) should tell you what happens to that money. If not, the transit voucher vendor should be able to give you some documentation on this.
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