Have a multi-state client with an operation in New Jersey.
The disability provider, Lincoln Mutual, pays temporary disability to sick or injured employees. In some cases this is taxable. The insurance company actually puts these people on THEIR own payroll, and issue them W-2s, etc. They withhold FICA, Medicare, and state required taxes.
There have recently been a couple people disabled. Lincoln Mutual is paying them on their own payroll. However, the insurance company is billing my client for the FICA and Medicare taxes that the insurance company is having to match.
This is really the responsibility of Lincoln Mutual, and an operating expense to them just like any other expense. However, they are telling me that in NJ, the disability act allows them the right to collect from the insured this matching expense for payroll.
Does this sound right? Does it go on in any other state?
The disability provider, Lincoln Mutual, pays temporary disability to sick or injured employees. In some cases this is taxable. The insurance company actually puts these people on THEIR own payroll, and issue them W-2s, etc. They withhold FICA, Medicare, and state required taxes.
There have recently been a couple people disabled. Lincoln Mutual is paying them on their own payroll. However, the insurance company is billing my client for the FICA and Medicare taxes that the insurance company is having to match.
This is really the responsibility of Lincoln Mutual, and an operating expense to them just like any other expense. However, they are telling me that in NJ, the disability act allows them the right to collect from the insured this matching expense for payroll.
Does this sound right? Does it go on in any other state?