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Date: January 6, 2009 
Bulletin Number: 872
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Subject

Change in Process for Retirement Plan Checkbox on Form W-2

Purpose

To inform agencies of the new process for checking the Retirement Plan checkbox in Box 13 of the Form W-2 Wage and Tax Statement.

Background

In accordance with IRS Publication 590, “Individual Retirement Arrangements (IRAs),” and Instructions for Form W-2, the Retirement Plan checkbox in Box 13 of the Form W-2 must be checked for all employees who are eligible for a retirement plan, including those who do not participate.

All employment positions in New York State government offer retirement system membership.  Therefore most employees filling these positions are eligible to participate in a retirement program and the Retirement Plan checkbox on the employee’s W-2 should be checked.

However, the exception is New York State employees who earned wages in 2008 and also received a public pension from a position for which the individual retired prior to 2008.  These employees cannot contribute to a public pension program.  The Retirement Plan checkbox on these employees’ W-2 should not be checked.

PayServ does not contain information for all public pensions (i.e. local government) so OSC is unable to identify these affected employees.  Agency action is required to identify these employees.

Affected Employees

All employees eligible to participate in a Retirement Plan.

Effective Date(s)

Immediately.

OSC Actions

OSC will automatically check the Retirement Plan checkbox in Box 13 of Form W-2 for all employees eligible to participate in a retirement plan.

OSC will ensure that the Retirement Plan checkbox is not checked for the employees that agencies identify.

Agency Actions

Agencies must identify employees who earned wages in 2008 and also received a public pension from a position for which the individual retired prior to 2008, as stated above.  The Retirement Plan checkbox in Box 13 of Form W-2 should not be checked for these employees.

Agencies must email their DeptID, employee names and last 4 digits of the EmplIDs to the Payroll Deductions mailbox no later than January 9, 2009.

Questions
Questions may be directed to the Payroll Deductions mailbox.