FICA/Medicare Taxes

[Guest IRISH79]

Plan requires that participants pay 1.45% FICA/Medicare tax (Employer matches) on vested retirement credits made to the plan. If participant is terminated for cause and benefits are forfeited, is the amount of the payroll taxes withheld refundable to the participant from either the plan or the employer?

[jpod]

Answer(s):

1. What does plan say?

2. Regardless of what the plan says, it is not refundable from IRS. Tax is due and owing when there is no longer a substantial risk of forfeiture, and the risk of forfeiture due to a for cause termination is not a substantial risk of forfeiture (unless you have a highly unusual definition of "cause").