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Barrister
Barrister, Attorney
Category: Business Law
Satisfied Customers: 34300
Experience:  16 years practicing attorney, JD, BA, MBA
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If a company requires a $10.00 fee to be deducted from an emplyees

Customer Question

If a company requires a $10.00 fee to be deducted from an emplyees check each payroll until a total of a $250.00 deposit is banked to be applied against damaged uniforms/equipment and when the employee quits and the employee is issued a check for the $250.00 they paid to the company which was held as a deposit, can we 1099 the employee at the end of the year that received the $250.00 check? I think not. What is the answer?
Submitted: 3 years ago.
Category: Business Law
Expert:  Barrister replied 3 years ago.
Hello again,
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can we 1099 the employee at the end of the year that received the $250.00 check?
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If the $10 was withheld from the employee's check with permission, then they should already have had taxes taken out of that amount if the deduction is made prior to any pay being issued. So if an employee's pay is gross $1000 and net after taxes $750 and they get $740 due to the deduction, then they have already been taxed on the amount and a 1099 wouldn't be issued. This is because it was their after tax money that was withheld.
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Thanks.

Barrister

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