University of Minnesota
Office of Human Resources
http://www.umn.edu/ohr
612-625-2016

Before-tax and After-tax Deductions

Before-tax deductions reduce your taxable wages. Some before-tax deductions will reduce your Federal and State, or W-2, wages, while others will also reduce your social security and Medicare wages.

After-tax deductions do not reduce your taxable wages. They are taken only after taxes have been withheld from taxable wages.

Description
The type of deduction being withheld.
Amount
The amount of the deduction withheld from the current period. The YTD Amount shows on the most recent pay statement only.

Types of Deductions

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Before-tax Deductions

Deductions not subject to Federal and State income tax withholding:

  • 457 Deferred Compensation Plan- Tax-deferred retirement savings and investment plan
  • Faculty Retirement Plan - The required retirement plan for faculty, and Professional and Administrative employees
  • Minnesota State Retirement System (MSRS) - The required retirement plan for Civil Service and Bargaining Unit employees
  • Local 880 Health & Welfare
  • Optional Retirement Plan - Voluntary retirement savings and investment plan
  • Public Employee Retirement Association (PERA) - Required retirement plan for University of Minnesota Police Officers
  • Thrift Savings Plan - A 401K plan for Federal employees

Deductions not subject to Federal and State income tax withholding, or to Social Security and Medicare withholding:

  • Parking
  • Metropass
  • Medical
  • Federal Medical
  • Dental
  • Flexible Spending Accounts:

    • Health Care Reimbursement
    • Dependent Care Reimbursement
    • University of Minnesota Physicians Medical Reimbursement
    • University of Minnesota Physicians Dependent Reimbursement

After-tax Deductions

After-Tax deductions include, but are not limited to, the following:

  • Union Dues
  • Life Insurance
  • Community Fund Drive
  • Recreational Sports Permit
  • Athletic Tickets
  • Disability Insurance
  • Long Term Care Insurance
  • Northrop Dance Series
  • Garnishments (see below)

For more information about a particular deduction, you should contact the appropriate area, such as Employee Benefits, Parking and Transportation Services, Recreational Sports, Department of Athletics, or Northrup Concerts & Lectures. For information about Community Fund Drive deductions, you should contact Payroll Services.

Garnishments

Garnishments are court-ordered deductions. Payroll Services is required to withhold amounts from an employee's compensation to satisfy a child support order, tax debt, or court judgment. There are several common types of garnishments:

  • Creditor Garnishment - This is a legal order that authorizes the withholding of a portion of an employee's wages to satisfy a debt owed to a creditor. Payroll Services is required to comply with the court order to withhold and remit the amount stipulated in the order, up to the maximum allowed by law.
  • Child Support Withholding - This is the process of withholding amounts from an employee's wages to satisfy a child support order from a court or a state child support enforcement agency. The enforcement of child support orders is a joint Federal/State responsibility, with Title IV-D and the Consumer Credit Protection Act providing the legal framework.
  • Tax Levy - Federal or State tax levies require the deduction of amounts from an employee's wages to satisfy a tax debt. Tax levies must be satisfied before all other garnishment orders, except for child support withholding orders.
  • Bankruptcy orders - Issued under Chapter XIII of the Bankruptcy Act and take priority over other wage claims, including tax levies and child support withholding orders received before the bankruptcy. All other garnishment orders are stopped because the trustee will pay them out of the amount withheld under the bankruptcy order.
  • Student Loans - In 1991, Congress amended the Higher Education Act to allow for garnishment of wages to repay delinquent student loans granted under the Federal Family Education Loan Program or Guaranteed Student Loan Program. Child support withholding orders will take priority over student loan garnishment orders.