Tax reporting Discriminatory Cafeteria Plan

[Guest Quicksilver]

After you do your discrimination test, and have to have to include some benefits in gross income for a key participant. How is that tax reporting accomplished?

Do you have to issue a corrected W-2?

How would the FICA tax be collected?

[Guest jackmo]

If W-2s had already been issued, then yes, you would issue a corrected W-2. If not, then the excess dollars would simply be added back to Box 1.

I would guess that the employee portion of the FICA tax would be payroll deducted from the employee, and the employers part (plus employees) would be reported and paid on the next quarterly return.