What is Pre-Tax and How Does It Affect Me?
Payroll deductions for health and dental coverage can be deducted under the provisions of the Internal Revenue Service Tax Code, Section 125. The County's Section 125 Plan  allows you to make these premium payments from pre-tax dollars.
If you elect YES on your Pre-Tax form:
 the money you spend on health insurance coverages will not be subject to federal income or Social Security taxes- these savings will show up in your take home pay
- the tax savings will be somewhat different for each employee, in that any two people are not likely to have the same coverages, income and Social Security status.
The following examples will give you an idea of how the Pre-Tax Plan can work for you:
EXAMPLE: Employee is married, has family medical and dental coverages and has claimed one exemption for Income Tax.
| If you have NO on Pre-Tax |
Bi-weekly Gross Pay
(Taxable Income) |
$1,000.00 |
$1,500.00 |
$2,000.00 |
Deduction for Health & Dental
Federal Income Tax
Social Security Tax
Medicare Tax
Net Bi-Weekly Take Home Pay
(24 pay periods)
|
-122.32
-72.40
-62.00
-14.50
$728.78
|
-122.32
-147.40
-93.00
-21.75
$1,115.53
|
-122.32
-222.40
-124.00
-29.00
$1,502.28
|
If you have YES on Pre-Tax
|
Bi-weekly Gross Pay
Pre-Tax Deduction for Health & Dental
Taxable Income
Federal Income Tax
Social Security Tax
Medicare Tax
Net Bi-Weekly Take Home Pay
(24 pay periods)
|
$1,000.00
-122.32
877.68
-54.06
-54.42
-12.73
$756.47
|
$1,500.00
-122.32
1,377.68
-129.06
-85.42
-19.98
$1,143.22
|
$2,000.00
-122.32
1,877.68
-204.06
-116.42
-27.23
$1,529.97
|
 YES on Pre-Tax will mean more money in your take home pay; however, you must be aware that since your Social Security wage is reduced, your Social Security benefit at retirement will reflect this very slight decrease in wages. Your other benefits such as the Florida Retirement System benefits and group life insurance coverage are not affected.
As with any tax reduction (benefit), the Internal Revenue Service places restrictions on its administration.
 One of these is that you may not change your Pre-Tax status or insurance coverages during the plan year unless you experience a Change of Status as shown on a Pinellas County Pre-Tax Plan form. - If you desire to make a change in your coverage due to a Change of Status, you must complete a Pre-Tax Plan change form and return it to Employee Benefits, Human Resources Department within 31 days of the event.
The plan year begins January 1 and continues through December 31st. Each year during the County's annual enrollment, you are given the opportunity to change your dependent coverages or switch plans. Information is sent out in the fall giving procedures and deadlines for making changes which will be effective with the next plan year.
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