Is it Taxable or Not???

scottofstead

My employer is an insurance agency in Washington State. One of the perks we provide our associates is that we reimburse the amount of the commissions they would have paid on their personal insurance if they buy it through our agency (auto/homeowners/liability/etc.). Those amounts have always been reimbursed through payroll, and taxed as additional income.

Now I've got a couple of people challenging that practice, and I'd like to hear from anyone out there who can tell me if this should be considered additional income (and therefore taxable) or if it's just essentially an expense reimbursement, as one of our associates is claiming.... Thanks for your help!

Leslie

I'm curious to see the answers to this. We have a situation where some personnel are given a monthly food allowance. Every other paycheck the amount is totalled, thrown into the paycheck, taxed, then removed. I have an employee saying the same as above. I'd like to know too, you accounting/payroll gurus out there.

Skylyon

Yes it is taxable

From what I remember of my tax class yes. You want to include the commissions because an insurance agent has to include in income commissions earned on writing their own policies and this would also have the same effect. I hope that I have helped you out and not confuse you.