If your employer has been taking insurance premiums out post tax instead of pre tax like they should have been all along would they not owe money on what they have been taking out wrong?

Answer 1

Yes, if your company has a Section 125 plan in place and the insurance premiums in question are included under it. I just had most of that issue cross my desk this week. The bookkeeper made the premiums pre-Federal income tax, but not pre-tax for FICA, Medicare, or State withholding. As the problem affected employees at 4 companies over 2+ years, I suggested the solution of corrected W-2s and 941s, no change to Federal or State withholding on the W-2s and, therefore, no amended income tax returns, and direct payment of the over-withheld FICA and Medicare taxes to the affected employees. The companies wil receive the overpaid FICA and Medicare taxes from the IRS when they file the amended 941s. The companies, the employees, and the bookkeeper all liked this solution. Similarly, for you, you are due one or more corrected W-2s and a refund of any over-withheld FICA and Medicare taxes. Only the company can submit corrected 941s to the IRS for refunds of any overpaid Social Security and Medicare contributions, so the refund to you of the half that was withheld from your pay must come from your employer. If your Federal and State wages were also overstated, you will need to file amended income tax returns for the affected period(s) to get refunds of any overpaid income taxes. It would be reasonable for you to ask your company to provide or pay for professional assistance with these returns if you need it. More information: http://www.querycat.com/faq/3df310c2135b03f5dd012ddf56bc5e2f I wouldn't disagree with the above, but would try stress: As noted, it is vital to assure the premiums are in fact of a type that should have been a reduction to your taxable income (not all, in fact many insurance type payments are not pre tax).