USA Treatment for Reimbursed Medical Expenses

[rcdavis28]

Hello All,

Every month for all of 2020 certain employees had a portion of their medical insurance premiums deducted from their checks. In August of this year (2021) it was discovered that this was incorrect. They were not to have any amounts taken out for health insurance at all. The company reimbursed around $12k for the deductions in August of 2021.

Naturally, if this were to happen in period I would probably just credit the insurance expense account and be done. But since this happened over a period of time, I'm not sure what to do. The 2020 tax return has been filed. I know the answer is probably Go back to each month in the past and adjust the insurance expense account and then prepare an amended 2020 income tax return. I'm hoping someone else has experienced this and has a work-around though. Probably wishful thinking lol!

Of course the main issue now is that we have the $12k payment sitting here in August and I have no idea what to do with it. I can not credit it all to medical insurance expense for this period, because the account would have a deficit balance. I welcome any thoughts or feedback and it is appreciated!

 

[kirby]

Lost.
When your company paid the employees, entry was a $12k debit to, presumably, a suspense asset acct and credit to cash. So why do you say you “can not credit it all to medical insurance expense “. How can you post a credit to insurance expense when the item to be posted from suspense is a debit? Or you just mean?
Anyway, the path is to just expense that debit in the current period.

 

[Praz Finpoint]

Is there an overpayment to the Insurance provider by $12K which needs to be recovered?