Has anyone ever heard of constructive reciept?
We are able to sell back Paid time off at work 2 times a year . However now my job has told me that in order to see back the paid time off they must take out 10% of the total to comply with IRS regulations?
This was the email i recieved. Any thoughts on this?
To all employees,
Changes to the PTO Sellback Process In order to be compliant with IRS regulations, LGH must redesign its PTO sellback policy. Any employee selling PTO will receive 90% of the cash value (current base rate x hours x .90). This change is for PTO sellback only. PTO that is used for any type of vacation/sick/leave/holiday, or upon separation from the organization, will continue to be reimbursed at 100% value.
Why the change? The IRS has specific rulings involving earned PTO called “constructive receipt”. A 10% forfeiture of cash value is designed to make this plan compatible with IRS regulations regarding taxability. Many similar healthcare companies had already changed their PTO policies. To meet IRS guidelines, Lafayette General needed to change its PTO sellback process for two reasons: 1. To continue allowing employees to sell back PTO. 2. In order to avoid significant tax implications for all employees.
Submitted April 19, 2017 at 06:23AM by Lil_Bobby_hill http://ift.tt/2oUErF9
