Author Topic: HSA deduction error on Dec. 21 paycheck  (Read 1419 times)

jabell

  • 5 O'Clock Shadow
  • *
  • Posts: 19
HSA deduction error on Dec. 21 paycheck
« on: December 21, 2017, 10:08:54 AM »
We received an e-mail explaining there was a glitch with our HSA deduction for this last pay period.  The e-mail (below) explains the deduction was not taken out so we will not receive the tax deduction. 

“Good morning,

It has come to our attention that you, along with several employees, did not have the Health Savings Account (HSA) contribution taken out of your Dec. 21 paycheck. Instead, it was paid out to you as regular earnings. We are not clear on why this happened yet, but we are diligently researching the issue.
What does this mean for you?
Your net earnings for this paycheck may look slightly higher than normal. Since the Dec. 21 paycheck is the last paycheck of the year, we cannot take a catch-up contribution on any future check in 2017. Because of this, you will not receive the pre-tax contribution savings for this one pay period. If you would like to contribute to your account on an after-tax basis, you may do so by contacting Optum”

I realize it is just one pay period but this seems wrong.  Is my employer not obligated to make this right?

Thank you for your time

terran

  • Magnum Stache
  • ******
  • Posts: 3410
Re: HSA deduction error on Dec. 21 paycheck
« Reply #1 on: December 21, 2017, 10:53:27 AM »
I don't know whether or not they have an obligation to fix it, but do note that you can make the contribution directly to your account any time up to the tax filing deadline and deduct it from your taxes, so from an income tax perspective this won't really matter. It's likely that your payroll deducted contributions are not subject to FICA tax, but your direct contributions won't avoid that, so in that case this mistake is costing 7.65% of the missed contribution (less if your income counted for Social Security is over $127.2k as you only pay medicare tax on amounts over that).

Trudie

  • Handlebar Stache
  • *****
  • Posts: 1946
Re: HSA deduction error on Dec. 21 paycheck
« Reply #2 on: December 21, 2017, 11:11:44 AM »
I don't know whether or not they have an obligation to fix it, but do note that you can make the contribution directly to your account any time up to the tax filing deadline and deduct it from your taxes, so from an income tax perspective this won't really matter. It's likely that your payroll deducted contributions are not subject to FICA tax, but your direct contributions won't avoid that, so in that case this mistake is costing 7.65% of the missed contribution (less if your income counted for Social Security is over $127.2k as you only pay medicare tax on amounts over that).

I concur.

ohsnap

  • Bristles
  • ***
  • Posts: 296
Re: HSA deduction error on Dec. 21 paycheck
« Reply #3 on: December 22, 2017, 12:47:16 PM »
That's a bummer if you are going to lose out on the 7.65% because of the FICA. :(  When I managed payroll, we would have tried to run an immediate corrected payroll.  But...I think the problem is that they already paid it out to you, so if they run another payroll to send contributions for the affected employees to Optum, they're in effect paying you more for this year (they can't net it out against other earnings, which I think is what their email meant). 

Sorry. :(  Even payroll departments are humans.