overpayment

[willerd]

What is the name of your state? Florida

I was informed by my employer today. That over the course of the last four years I have been getting overpaid for the times that I was in charge. This sum comes up to 80,000 dollars gross and goes as far back as 2002. They would like me to pay it back at the rate of $500 per check over the next 160 paychecks. this is approximately 19% of my gross.

I would like to know where I stand on this and if I do have to pay it back and I assume I do would i be in my right to request that take the $500 out before taxes.

 

[cbg]

Yes, you do have to pay it back. If you were actually overpaid it doesn't matter who made the mistake; you have no legal right to keep the money.

There are only VERY limited circumstances in which the employer may legally make deductions before taxes and this doesn't even come close to meeting any of those circumstances.

 

[pattytx]

That's true, cbg, but Florida is not one of those states that has regulations controlling deductions in this manner. Is this net or gross? 80 thousand dollars? You didn't figure this out? Are they going to be reducing your gross pay by $500 each check?

 

[cbg]

I wasn't thinking so much of Florida law as Federal law. It's the IRS that puts restrictions on when something can be deducted pre-tax, not the states.

 

[pattytx]

Sorry, I misunderstood you. They can, however, reduce his gross by the amount of the gross overpayment. They just can't mix apples (gross) and oranges (net).

 

[willerd]

The overpayment is the total amount that was paid to me before taxes.

To clarify: I paid taxes on the original 80,000, that they overpaid me on and I will end up paying taxes on the money that I have to repay them with essentially be taxed twice.

If the above is correct is there any way to recoup the taxes that I paid on the over payment?

Just to remind everyone this FLorida.

 

[anteater]

If the above is correct is there any way to recoup the taxes that I paid on the over payment?

Sort of, but it is not a fun thing. See the IRS Pub 525:

http://www.irs.gov/pub/irs-pdf/p525.pdf

Page 32.

 

[pattytx]

That doesn't make any sense. If you make $1,000 per week, will they then be paying you $500 per week? If so, the taxes will take care of themselves.