Refund of FSA Highly Compensated Employee.

[Silver70]

Hello,

We have a couple employees that have contributed over their allowable amounts for the FSA as they have been classified as Highly Compensated Employees. I understand the refund must pass through payroll. Should the amount be taxed as a supplemental payment or as a regular payment that is taxed through the tax tables?

Thank you,

[AnneD]

Hi! It is my understanding that the refund should transpire as a regular payment, with appropriate taxes applied.