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Employer Reimbursement of Medicare Premiums in Lieu of Health Ins.

⁠

From:⁠

Maurice Gauthier Sent: Thursday, August 24, 2023 4:27 PM To: 'Susan Benson' <sbenson@cokkinzlerlaw.com> Cc: Christina Riekenberg <criekenberg@amaticscpa.com> Subject: RE: Katie's Medicare

That would be under Earnings, as you want it to be included in the taxable Gross Wages boxes on the W2.

Thanks,

Maurice Gauthier

Amatics CPA Group

(406) 404-1925 ext 315

NOTE: Our offices are closed on Fridays through 9/1/23

From: Susan Benson <

sbenson@cokkinzlerlaw.com⁠

> Sent: Thursday, August 24, 2023 3:55 PM To: Maurice Gauthier <

mgauthier@amaticscpa.com⁠

> Cc: Christina Riekenberg <

criekenberg@amaticscpa.com⁠

> Subject: RE: Katie's Medicare

One final question and then I will put this to rest J where do I put this in quickbooks? On the first part which is earnings or on the second part labeled additions, deductions and company contributions?

Thank you again for helping with this.???

Susie

From: Maurice Gauthier [

mailto:mgauthier@amaticscpa.com⁠

] Sent: Thursday, August 24, 2023 10:22 AM To: Susan Benson <

sbenson@cokkinzlerlaw.com⁠

> Cc: Christina Riekenberg <

criekenberg@amaticscpa.com⁠

> Subject: RE: Katie's Medicare

Hi Susan,

According to my conversation with Katie, Denia was re-imbursed for health insurance premiums charged by the company’s health insurance provider. The laws governing Medicare premium re-imbursements are different. In Katie’s situation, she would need to pay Federal and State income tax and FICA on this re-imbursement. The question then is how much of the total amount does the company want to pay. Just the premium amount and Katie would not be reimbursed for income tax and FICA? The premium amount plus FICA but not her income tax? Or the full amount, Premium plus income tax, plus FICA.?????

My conversations with Katie indicate the company is willing to reimburse the full amount.

Here’s an example to use as a guide to figure what the gross amount should be:

Katie’s Medicare premium cost: $400

State estimated income tax at 5%: 20

Federal estimated income tax at 15%: 60

Total of premium and income taxes: 480

To add the FICA amount, divide 480 by .9235: 519.76

So in this example, if you pay Katie a gross amount of $519.76, you’d cover her Medicare premium, her Federal and State income taxes, and her FICA.

Let me know if you have any questions.

Thanks,

Maurice Gauthier

Amatics CPA Group

(406) 404-1925 ext 315

NOTE: Our offices are closed on Fridays through 9/1/23

From: Susan Benson <

sbenson@cokkinzlerlaw.com⁠

> Sent: Thursday, August 24, 2023 9:52 AM To: Christina Riekenberg <

criekenberg@amaticscpa.com⁠

>; Maurice Gauthier <

mgauthier@amaticscpa.com⁠

> Subject: RE: Katie's Medicare

Thank you.

From: Christina Riekenberg [

mailto:criekenberg@amaticscpa.com⁠

] Sent: Thursday, August 24, 2023 9:50 AM To: Susan Benson <

sbenson@cokkinzlerlaw.com⁠

>; Maurice Gauthier <

mgauthier@amaticscpa.com⁠

> Subject: RE: Katie's Medicare

It will need to be part of her wages.

Christina A. Riekenberg

CPA, Shareholder

Amatics CPA Group

45 Discovery Drive

Bozeman, MT 59718

p: 406-404-1925

f: 406-404-1926

From: Susan Benson <

sbenson@cokkinzlerlaw.com⁠

> Sent: Thursday, August 24, 2023 9:49 AM To: Christina Riekenberg <

criekenberg@amaticscpa.com⁠

>; Maurice Gauthier <

mgauthier@amaticscpa.com⁠

> Subject: RE: Katie's Medicare

Christina and Maurice,

Katie has been speaking to Morris and has admitted that she will have to take out taxes for the health insurance reimbursement. So now I need to figure that out. Would it be best to set her up as a 1099?

Susie

From: Susan Benson Sent: Wednesday, August 23, 2023 4:29 PM To: Christina Riekenberg <

criekenberg@amaticscpa.com⁠

mgauthier@amaticscpa.com⁠

Subject: FW: Katie's Medicare

Maurice,

Sorry to resend this again but the other email was returned because I didn’t put cpa in the address after amatics. Please see below.

Susie

From: Susan Benson Sent: Tuesday, August 22, 2023 4:16 PM To: Christina Riekenberg <

criekenberg@amaticscpa.com⁠

mgauthier@amatics.com⁠

Subject: RE: Katie's Medicare

Good Afternoon Christina and Maurice,

Katie Lane is asking to be reimbursed for her Medicare. She wants Cok Kinzler to pay the taxes on the money she would get. She is asking to be reimbursed $445.00. Is there a way to do this. She spoke to Denia who was getting reimbursed and Denia doesn’t remember paying taxes or getting a 1099. I looked at Denias’s reimbursements and in Quickbooks it was listed on the memo as a Health Insurance Reimbursement. Denia got a flat $268.00 each month from Cok Kinzler. The expense item said 601-Operating Expense: 624-Insurance – Life & Health. I am reimbursing Mr. Cok each month $1,519.80 using expense item 309-Cok Capital: 310-Capital-Cok.

What do you recommend? Susie

From: Christina Riekenberg [

mailto:criekenberg@amaticscpa.com⁠

] Sent: Thursday, July 20, 2023 11:44 AM To: Susan Benson <

sbenson@cokkinzlerlaw.com⁠

> Subject: FW: Katie's Medicare

Hi Susie,

See below from our payroll department. Do you have a health reimbursement arrangement (HRA) set up for Cok Kinzler which is offered as a benefit to employees?

Christina A. Riekenberg

CPA, Shareholder

Amatics CPA Group

45 Discovery Drive

Bozeman, MT 59718

p: 406-404-1925

f: 406-404-1926

From: Maurice Gauthier <

mgauthier@amaticscpa.com⁠

> Sent: Thursday, July 20, 2023 10:22 AM To: Christina Riekenberg <

criekenberg@amaticscpa.com⁠

> Subject: RE: Katie's Medicare

Hi Christina,

There is a possibility that the employee can get reimbursed for their Medicare payments. If the employer has a an HRA that does not require insurance membership, the HRA can reimburse the employee.

Medicare Premiums Reimbursement Through Employer | Section 105 Plan (medicarefaq.com)⁠

⁠

Otherwise, giving money to an employee in an amount equal to the cost of their Medicare premium would be treated the same as giving money to the employee, fully taxable.

Thanks,

Maurice Gauthier

Amatics CPA Group

(406) 404-1925 ext 315

NOTE: Our offices are closed on Fridays through 9/1/23

From: Susan Benson <

sbenson@cokkinzlerlaw.com⁠

> Sent: Thursday, July 20, 2023 8:12 AM To: Christina Riekenberg <

criekenberg@amaticscpa.com⁠

> Subject: FW: Katie's Medicare

Good Morning Christina,

Katie Lane turns 65 this month. She will be coming off the Blue Cross Blue Shield and going on Medicare. It is the attorneys wish that she be reimbursed for her cost. Can I just run it as a reimbursement toward insurance and not tax it? Susie

From: Travis Kinzler Sent: Thursday, July 20, 2023 7:53 AM To: Susan Benson <

sbenson@cokkinzlerlaw.com⁠

> Subject: Katie's Medicare

Susie,

I am not sure if Cok told you this already, we are going to pay her what it costs her to pay her Medicare.

I am not sure if there is a way to pay this so it is not taxable, could you check with Christina. Thanks.

Travis

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