TSS - Overpayments

Overpayments

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First Published  :Thu Dec 11 16:20:59 GMT 2014
Last Modified  :Fri Apr 15 15:14:23 GMT 2022
Last Published  :Fri Apr 15 15:14:23 GMT 2022
Summary :  Reference for all employees who have general questions about overpayment of taxes. Audience: Employees

Response

Primary Information

    Tufts Support Services will initiate recovery efforts on all payroll overpayments as soon as the discrepancy is detected. Departments should not initiate any collection efforts.  When a department or an employee discovers that an overpayment has occurred, please notify Tufts Support Services as soon as possible via email at TSS@tufts.edu.

    Notification of Overpayment to Tufts Support Services

    • Name and EMPL ID of the employee or former employee
    • When the overpayment occurred (pay period(s) if possible)
    • How the overpayment occurred, for example, pay rate change, wrong bonus payment, incorrect supplement amount, late termination, incorrect vacation payout, etc.
    • Amount of Overpayment, if known.

    If Tufts Support Services discovers an overpayment, the department, and subsequently the employee, will be notified as soon as possible. The employee will receive an email or letter with a detailed breakdown of the overpayment, the repayment amount, and repayment options. If needed, the Payroll Office can establish a repayment plan to avoid any undue financial hardship for the employee. Any repayment plan questions can be directed to TSS@tufts.edu.

    Repayment Options

    Tufts Support Services offers the following repayment options:

    • Salary Deduction:  The Payroll Office can deduct the overpayment from the next pay period once an employee has given consent. This option is only available to active employees. Employees will need to sign a Salary Reduction Agreement, which is provided at the time of notification.

    • Debit/Credit Card Payment: Current and former employees can use a secure portal to repay the overpayment via a debit/credit card – Tufts Payroll Overpayment Recovery

    • Mail a check: Current and former employees can mail a check for the overpayment amount to Tufts Support Services. The check needs to be made payable to “Trustees of Tufts College” and sent to 169 Holland Street, 02144 Somerville, MA, Attn: HR – Tier 2.


    Tax Implications for Repayment of Overpayment

    Repayment of Payroll Overpayments in Current Calendar Year

    • The employee will only need to repay the net amount of the overpayment.

    • The employee’s repayment will be reflected in his or her IRS Form W-2 Wage and Tax Statement. 

    • The Payroll Office will reduce the employee’s taxable wages and associated taxes for that calendar year to ensure the year-end W-2 Form is correct.

    Repayment of Prior Calendar Payroll Overpayments

    • The employee’s W-2 for the year of overpayment will not reflect their repayment.

    • The wages paid in error in the prior year remain taxable to the employee for that year because the employee received and had use of those funds during that calendar year.  

    • The employee should consult the IRS Publication 525 (Repayments) with respect to reporting the repayment of wages for a prior year.

     

     


     

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Keywords

    Overpayment, repaid, reimburse, refund, claim, tax, tax statement, tax withholding, tax deduction, W-2, W-4, tax collection, tax return