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New Member
posted May 31, 2019 6:21:54 PM

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?

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5 Replies
Level 15
May 31, 2019 6:21:55 PM

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.)

New Member
May 31, 2019 6:21:57 PM

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

Level 15
May 31, 2019 6:21:57 PM

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

Level 15
May 31, 2019 6:21:59 PM

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

Alumni
May 31, 2019 6:22:01 PM

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.