Purpose

To inform agencies of the processing of the taxable fringe benefit CLEFR for 2013

Legal Reference

Pursuant to Internal Revenue Code Section 61, certain fringe benefits such as the Certification, Licensure and Exam Fee Reimbursement are considered taxable income.

Affected Employees

Employees who participated in the PEF or CSEA Certification, Licensure and Exam Fee Reimbursement Program

Effective Date(s)

Institution paychecks dated November 27, 2013
Administration paychecks dated December 4, 2013

OSC Actions

OSC will process CLEFR transactions as submitted by GOER and CSEA.

The amount will be added through Time Entry using the earn code CFR. This amount is used for reporting and tax withholding purposes only and does not increase the employee’s compensation.

CFR is subject to all applicable withholding taxes. CFR and the amount will appear on the employee’s paycheck or direct deposit advice statement.

The CLEFR amount will be reported on the employee’s Form W-2 in box 14 under code FRB.

Communication to Affected

A letter will be sent by the Governor’s Office of Employee Relations to affected PEF participants informing them of the tax implications.

For Administration pay cycle agencies, these transactions must be entered no later than Pay Period 19 Lag and Pay Period 20 Current.

For Institution pay cycle agencies, these transactions must be entered no later than Pay Period 18 Lag and Pay Period 19 Current.

CSEA participants are informed of the taxability upon enrollment in the program.

Questions

Questions regarding this bulletin may be e-mailed to the Tax and Compliance mailbox.