The Pre-Tax Plan allows employees to have their medical, dental and/or vision premiums (excluding domestic partner portions of the premium) deducted from their salaries before income taxes are calculated. Using the Pre-Tax method for premium payments, can reduce employee's taxable income, and through tax savings, lessen the impact of insurance cost on their take home pay.

Eligibility

The Pre-Tax Premium Plan is available to all employees enrolled in the Medical, Dental and Vision plans deducted through NMSU Payroll.

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Enrollment

At the time of enrollment in medical, dental and vision plans. Once Pre-Tax is opted, it will automatically apply to medical, dental, and vision premiums. The Pre-Tax Plan remains in effect during the employee's entire employment at NMSU:

1. unless declined during the open enrollment period, or;
2. in response to a qualifying change in status.

Advantages

• Employee tax savings. Employees do not pay federal, (and in most cases state and local income taxes), Social Security and Medicare taxes on the Pre-Tax contribution amount. Unemployment and Worker's Compensation taxes (in some states) are based on employee's pay after Pre-Tax contributions.
• Lower taxable income. Reduces the amount of taxable income on your W-2.
• Reduction of NMSU Social Security and Medicare tax liability.

Disadvantages

• Social Security benefits may be reduced due to the lower compensation that is considered for calculating a Social Security benefit.
• Elections may only be revoked during a plan year due to a change in status or other changes permitted under the Treasury Regulations.

Employees may want to consult with a tax advisor prior to making changes to the Pre-Tax or Post-Tax election. If you elect this benefit, you may not use your medical, dental and vision premiums as deductions when you file federal and state income tax returns.