Watch for tax withholding for fringe benefits

Members covered by the State Employee Health Benefit have access to numerous great “fringe benefits” as part of the health coverage. This includes things like Healthy Rewards and the fitness club reimbursement. Unlike the health benefit, however, “fringe benefits” are taxable under IRS guidelines. The state processes the withholding for these taxable items once a quarter, and for the most recent quarter, that withholding will happen in this week’s (April 14) paycheck.

The most recently completed quarter includes any fringe benefits received between November 2016 through January 2017. If you have questions about the amount withheld, you can contact Anthem directly or your HR/payroll office.

You can see the complete notice from the state below:

ANTHEM and HEALTH REWARDS

PAYROLL PROCESSING PLANNED FOR THE 04/14/2017 PAY CHECK

Those employees that have been reimbursed directly (paid to employee) or indirectly (paid to facility/organization on behalf of the employee) for fitness club, equipment and education expenses and gift card issuances for Nov 2016 through Jan 2017 are planned to be processed with the pay check dated 4/14/2017. This process will report the first quarter of fringe benefits for Anthem Rewards reporting year.

These dollars are considered a fringe benefit and will increase taxable wages and withholding for all Federal, Social Security and Medicare Taxes. Pursuant to IRS guidelines, the value of these taxable benefits received by employees in the period of November 2016 through October 2017 will be included in the employee’s 2017 wages.  This process is being performed to meet Federal fringe benefit reporting requirements. The dollars associated with this process are listed below as pay code number, long description and check description:

  • 702  HEALTH CLUB REIMBURSEMENT “HLTHCLNF”
  • 703  HEALTH EDUC REIMBURSEMENT  “HLTHEDNF”
  • 704  HEALTH EQUIP REIMBURSEMENT  “HLTHEQNF”
  • 712  HEALTH REWARDS  “HLTHREW”

 

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