Purpose

To inform agencies how the taxable fringe benefit of the Certification and Licensure Exam Fee Reimbursement (CLEFR) will be applied to employees’ reportable taxable income and withholdings for 2008

Legal Reference

Pursuant to Internal Revenue Code Section 61, certain fringe benefits are considered income for tax purposes

Affected Employees

Employees who participate in the PEF, CSEA or M/C Certification and Licensure Exam Fee Reimbursement Program

Effective Date(s)

Administration paychecks dated November 26, 2008

Institution paychecks dated December 4, 2008

OSC Actions

Based on information provided by GOER and CSEA, OSC will add the value of CLEFR to the employee’s taxable income for 2008. The amount will be added through Time Entry using earn code FRB. Only Social Security, Medicare, State and Local taxes will be withheld. “Fringe Benefit” and the amount will appear on the employee’s paycheck stub or direct deposit advice statement.

Communication to Affected Employees

A letter will be sent by the Governor’s Office of Employee Relations to affected PEF and M/C participants explaining the tax rules and describing how the CLEFR amounts will be displayed on the employee’s paycheck stub or direct deposit advice statement. CSEA participants were informed of the taxability upon enrollment in the program.

Agency Actions

No agency action is required.

Questions

Questions may be e-mailed to the Payroll Deductions mailbox.