"Scott" <sstudier[at]yahoo.com> wrote:

- quote -

I am not a tax expert, but...

I think you owe them the money, especially if they paid it
out to you in claims. It is usually common business courtesy
in a case like this to allow you to pay it back over a
period of time. If you still work there, they can work out
an increased withholding until it is paid back.

HOWEVER THEY OWE YOU corrected W-2's for these years
removing these funds from Box 1 and reporting them in box 12
(category D I think) as deferred compensation. Then you can
amend your tax returns for these years appropriately, and
get back the tax you paid on that money.

Since it goes back two years, watch out for the three year
time limit on amended returns; make sure you get the
corrected W-2's. If you can prove that you authorized the
deduction, and are now being asked for the funds, you are
entitled to corrected W-2's.

--
Jim (for e-mail replace invalid with net)
"Remember, an amateur built the Ark; professionals built the Titanic."

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Scott wrote:

- quote -

Your main concern is not a tax matter, but a legal concern.
I can't say if you're indebted legally to repay the money,
but I kinda suspect you are. Consult a local attorney here.

Whatever the upshot of that is will determine what is to be
done tax wise.

Happy New Cheer$,
Harlan Lunsford, EA n LA

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My community college employer recently told me that they
failed to withhold on my paycheck for "125" cafeteria plan
medical account for the past 2 years. They DID however pay
the ERS (Employee Retirement System of Texas) for the amount
that I did authorize (through the annual enrollment). I
have been receiving checks for my claims on my account over
the past two years and was not aware of their negligence
until recently.

The amount they say I owe to the community college is at
least $4000 and maybe more.

I participated in the annual enrollments, and directed for
withholding. and signed the salary reduction agreement. I
believe I have fulfilled all my obligations.

Since this is a pre-tax withholding, my federal income tax
is messed up because I paid taxes on the money last year.
Now they may want payment from after tax monies.

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