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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I have been retired for ten years. Social security taxes are

Resolved Question:

I have been retired for ten years. Social security taxes are with held from my health club re-imbursement benefit. can this be a tax credit as it is unearned income?
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
HelloCustomer

Could you please explain exactly what this health club reimbursement benefit is that you are receiving? What is it for and who pays it to you?

Are you saying they withhold social security and medicare taxes from this payment?

Do you also receive a W-2 form at the end of the year for this money that you receive for the health club reimbursement?


Customer: replied 7 years ago.
City of New York Managerial Benefits fund offers this benefit. Funds are paid to MBF by the City of New York. It came on a W-2 form. I accept that this is taxable but I last worked 10 years ago. How is this earned income? Both medicare and retirement taxes were with held.
Expert:  Merlo replied 7 years ago.
Hello againCustomer

Social security and medicare taxes are only to be withheld from wages or services that you performed as an employee.

If the benefits you are receiving are part of your retirement package, they should not be subject to SS and Medicare taxes.

You should first contact the Fund and ask them for a refund of these taxes. If they are not willing to refund these taxes, you may apply for a refund of SS and Medicare taxes which were withheld in error by filing Form 843 with the IRS.

http://74.125.95.132/search?q=cache:z79jdwsTi3gJ:www.irs.gov/businesses/small/international/article/0,,id%3D104936,00.html+reclaim+social+security+taxes+withheld+in+error&hl=en&ct=clnk&cd=3&gl=us

You may also file Form 3949A with the IRS to report that this organization is taking False Deductions from your payments.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you.

Merlo and 3 other Tax Specialists are ready to help you
Customer: replied 7 years ago.
My employer states that you were wrong. He says that all cash payments paid under the health club re-imbursement are fringe benefits and such are subject to social security withholding taxes. As they get this question often this time of year I am accepting their explanation. I will accept yours with a "yes" so you can keep your 100% rating. Thanks anyway.

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