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vmama415
New Member

Job gave me two gift cards totaling $200 and put $455 as income on my check, then put $255 as a deduction after taxes. Is this legal???

I don't know how two gift cards of $100 each can be put as $455 Of income on my check, raising my income with money I never actually even got?
1 Best answer

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Opus 17
Level 15

Job gave me two gift cards totaling $200 and put $455 as income on my check, then put $255 as a deduction after taxes. Is this legal???

Unless there is more to the story it sounds like they made a mistake.

The gift cards are taxable income.  They have to be added to your W-2, and the company has to withhold 7.65% social security and medicare tax (take an extra $15.30 from your regular wages).  They don't have to withhold federal and state income tax (although they could) but you will be responsible for those taxes on your tax return.

If they grossed you up by $455, does that mean they withheld $34.81 in social security and medicare instead of $15.30? That's not correct.  Nor is adjusting it back down to $200 with an after-tax adjustment (a before-tax adjustment would give the correct income tax but probably still the wrong social security tax.)

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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5 Replies
Opus 17
Level 15

Job gave me two gift cards totaling $200 and put $455 as income on my check, then put $255 as a deduction after taxes. Is this legal???

Unless there is more to the story it sounds like they made a mistake.

The gift cards are taxable income.  They have to be added to your W-2, and the company has to withhold 7.65% social security and medicare tax (take an extra $15.30 from your regular wages).  They don't have to withhold federal and state income tax (although they could) but you will be responsible for those taxes on your tax return.

If they grossed you up by $455, does that mean they withheld $34.81 in social security and medicare instead of $15.30? That's not correct.  Nor is adjusting it back down to $200 with an after-tax adjustment (a before-tax adjustment would give the correct income tax but probably still the wrong social security tax.)

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
vmama415
New Member

Job gave me two gift cards totaling $200 and put $455 as income on my check, then put $255 as a deduction after taxes. Is this legal???

Thank you,  it sure didn't sound right to me!!!
SweetieJean
Level 15

Job gave me two gift cards totaling $200 and put $455 as income on my check, then put $255 as a deduction after taxes. Is this legal???

Which state?  Maybe there is some other statutory deduction, such as for unemployment comp or state disability insurance.
SweetieJean
Level 15

Job gave me two gift cards totaling $200 and put $455 as income on my check, then put $255 as a deduction after taxes. Is this legal???

Ask your payroll office.  They may have made a deduction for a 401(k) contribution, health insurance premium, flexible spending plan, or something similar.
ScruffyCurmudgeon
Level 8

Job gave me two gift cards totaling $200 and put $455 as income on my check, then put $255 as a deduction after taxes. Is this legal???

Suggest that at minimum you obtain a written accounting - similar to what would be on a paycheck stub - that clearly shows the gross amount reported as income and then each deduction or withholding.
Scruffy Curmudgeon--PFFM/ IAFF, FireFighter/Paramedic - Locals 718/30, Univ. faculty
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