Why is the gross up required? I did not receive any additional cash to cover the taxes withheld, so I don't understand why my taxable income includes both the $268 for GTL premiums & $141.39 for taxes on $268+$141.39? The company started assessing $13.40/pay period in September and decided in December to "catch-up" the 20 pay periods earlier in the year I as not assessed the $13.40 premium. For the 6 pay periods it was included on my pay stub, there was no gross-up - only the $13.40 was included in my wages and taxes were withheld and the amount deducted from the net pay I received. It doesn't make sense to me that these 20 payments are being treated differently and that only the 6 pay periods are being included in Box 12 of my W2 instead of 26 pay periods since they "caught them all up" in December and I was imputed for a full year. I have searched and searched and all I can find is that a company can gross up income, but everything I read implies that is done because they pay you to cover the tax liability generated. That did not happen here - my net pay was $0 for this transaction.
