Does anyone know if there are any issues with a SUB Plan taking an administrative fee from a particular benefit in order to pay any FICA and/or FUTA taxes both the employers share and employees share?
For instance, a supplemental seperation benefit is paid from a SUB Plan. The Plan assesses a 10% administrative fee on the benefit amount and uses this 10% amount to pay the FUTA taxes as the employer and the FICA taxes for the employee and as the employer.
Thanks
Full Version: FICA FUTA taxes on SUB benefits
QUOTE (benpat3 @ Apr 10 2008, 03:58 PM) 
Does anyone know if there are any issues with a SUB Plan taking an administrative fee from a particular benefit in order to pay any FICA and/or FUTA taxes both the employers share and employees share?
For instance, a supplemental seperation benefit is paid from a SUB Plan. The Plan assesses a 10% administrative fee on the benefit amount and uses this 10% amount to pay the FUTA taxes as the employer and the FICA taxes for the employee and as the employer.
Thanks
For instance, a supplemental seperation benefit is paid from a SUB Plan. The Plan assesses a 10% administrative fee on the benefit amount and uses this 10% amount to pay the FUTA taxes as the employer and the FICA taxes for the employee and as the employer.
Thanks
There may be a prohibited transaction issue. See ERISA Opinion Letter 82-32A
SUB plans if set up properly are not subject to FICA/FUTA. And even if they were, I'd be pretty pist if you used my SUB benefits for the employer portion.
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