[5/1/2020] - 2019 Tax Calculation of Deduction Errors

Here's what happened:

When calculating taxes for some  HSA, FSA, parking & transit, and dependent care deductions in the time period of September 9, 2019  through December 30th, 2019 we encountered some errors. These deductions were incorrectly treated as post-tax, and certain employees were over withheld on certain taxes.

How to find the impact report:

A detailed report including a list of affected employees, the total impact, and which lines of coverage were impacted can be found in the Zenefits Inbox of the company administrator on file.

Here's what we're doing to fix it:

To correct this, Zenefits has generated a  W-2c  with the correct gross wages and taxation amounts for any affected employees, which they can find in the Documents section of the Personal Information app in their Zenefits account.

Zenefits will process amendments with the necessary federal and state jurisdictions. Once the jurisdictions process these, your company will receive refunds to the bank account on file. These can then be used to refund your employees for any amount that was over withheld. We don't have an estimate on how long this will take, especially because many jurisdictions are experiencing delays due to COVID-19.

What to do moving forward:

1. Your employees will receive a W-2c. They must either amend their annual filing if they already filed OR they will file their W-2c with their W-2.

2. You will receive a refund from the respective tax jurisdictions. Then, you will refund your employees using this process.

  • Using the amount on the report provided to company administrator in their Zenefits Inbox (linked above), process the refund to the affected employee using a non-taxable  reimbursement on an off-cycle pay run.

If you're an affected employee:

If you received a W-2c from Zenefits as a result of this calculation error, you will use this to complete your personal filings. If you've already completed your annual filing, then you'll need to amend your original filing. Please contact our Customer Care teams if you have concerns about paying any applicable service fees for refiling.

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