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Can an employer gross up an employees pay who is participating in a Section 125 Plan and, if so, will the employee avoid taxation on that income?

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Can an employer gross up an employees pay who is participating in a Section 125 Plan and, if so, will the employee avoid taxation on that income?

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No, if the employer grosses up income the deduction for the employees contribution to the Section 125 Plan will be disallowed.

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