Imputed Income on Payslip: What Is It?

Every so often we will see a line on our payslip called Imputed Income. 

This started around 2019. The CTA Payroll Department posted the following explanation:

CTA’S RETIREE HEALTH CARE TRUST (RHCT) TAX CHANGES

The IRS has determined that your mandatory 3% payroll contributions to the RHCT are exempt from Social Security and Medicare taxes. The combination of Social Security and Medicare taxes for most employees equals 7.65% of taxable wages. 

 

Currently, the CTA includes your RHCT contributions in your taxable wages for Social Security and Medicare purposes. Beginning with your first pay date in July 2019, your RHCT contributions will be treated as a pre-tax deduction from your wages for Social Security and Medicare purposes. This change will result in a slight increase in your take-home net pay. The amount of this increase will vary based on your taxable wages.

 

 There will be a small refund based on your earnings from January 1, 2019 through June 30, 2019. This refund will be issued in a separate check on or before December 31, 2019. If you have any questions, please call the payroll hotline at 312-681-3096. 

Learn more about Imputed Income at Wikipedia.