Termination of insurance title and reimbursement of overpaid premium

When there is an overpayment in the contributions paid

It happens that the taxpayer pays more than the due amount of insurance contributions to ZUS. Pursuant to Art. 24 sec. 6a of the Act on the Social Insurance System, unduly paid contributions are counted by the Social Insurance Institution against current or overdue contributions. If there are no arrears, the overpayment is credited towards future liabilities, in this case, at the taxpayer's request, it may also be refunded.

But what if the overpaid contributions concern, for example, an employee for whom the insurance title has already expired at the time of disclosure of the overpayment?

Such a situation will take place, for example, when the health insurance premium is overpaid, which is financed by the employee - deducted from his salary, and the employee, for example, resigned from work before disclosing the overpayment.

Overpaid contributions are refundable

The overpaid contribution financed by the employee's remuneration is returned to that employee, even if he no longer performs work for the entrepreneur who made the overpayment. If the contribution payer becomes aware that the contributions paid for an employee have been paid in a value greater than required, and the employee no longer performs work for the above employer, the employer should apply for a reimbursement with an appropriate application. ZUS pays the overpayment amount within 30 days from the date of receipt of the application, assuming, of course, that the payer has no arrears.

If the payer does not apply for a refund, or the refund is not possible due to, for example, arrears in paying contributions, he must reimburse the employee the amount of overpaid contributions from his own funds.

The reimbursement received by the employee will in this case be his income from the employment relationship. When this happens during one tax year, the matter is quite simple.

The payer, while preparing the PIT-11 information for the former employee, will include the appropriate value of the contributions paid. The situation is different, however, when the event of higher payment of contributions and the disclosure of this fact takes place in two different tax years, e.g. undue contributions were deducted and paid in 2012, while the overpayment was disclosed in 2013.

In this case, neither the payer nor the employee corrects the annual returns for the previous year - 2012, however, after receiving the refund, the employee will be obliged to add the amount of the overpaid health insurance contribution to the income tax in the tax return for the current year, i.e. the one in which the refund was received (2013 r).

In such a situation, the payer is also obliged to prepare a document confirming the reimbursement, e.g. a letter informing the employee about the amount of the refunded health insurance premium, which was deducted from income tax in the previous period.