Guest Chris O'Daniel Posted January 26, 2000 Posted January 26, 2000 We offer a DCRA under section 129 (not a cafeteria 125). Can we return any unused withholding to employees? I see where 125 will not allow this but I'm missing it under 129.
Guest msearle Posted January 27, 2000 Posted January 27, 2000 I would say no. I'll do some research to substantiate this answer. ------------------
JWK Posted January 27, 2000 Posted January 27, 2000 You need to define "withholding" in order to get an answer to this question. If you mean amounts withheld on a pre-tax basis from employees' pay, you are subject to the 125 rules. If you mean something else, please specify.
Guest Chris O'Daniel Posted January 27, 2000 Posted January 27, 2000 Thanks MSEARLE and JWK. JWK you are correct that by withholding I mean withheld from employees pay. Could you point me to where 129 and 125 combine on this issue? [This message has been edited by CHRIS O'DANIEL (edited 01-27-2000).]
JWK Posted January 28, 2000 Posted January 28, 2000 I guess I would turn the question around and ask on what basis, other than section 125, can an employee redirect compensation to the purchase of a nontaxable benefit without being taxed on the compensation under the constructive receipt rules?
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