Purpose
To inform agencies of the processing of the taxable fringe benefit CLEFR for 2017.
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)
Administration paychecks dated November 29, 2017
Institution paychecks dated December 07, 2017
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.
Tax Information
Certification, Licensure and Exam Fee Reimbursement is considered a taxable fringe benefit. As such, it is supplemental taxable income, will be added to the employee’s taxable gross wages for tax withholding purposes, and is subject to employment and income taxes.
Federal, State and New York City income tax withholding will be calculated using the Aggregate method. Yonkers income tax withholding will be calculated using the Flat Rate method. Yonkers Flat Rate Withholding is 1.61135% for Yonkers residents and 0.50% for Yonkers nonresidents.
The CLEFR amount will be reported on the employee’s Form W-2 in box 14 under code FRB.
Payroll Register and Employee’s Paycheck/Advice
The Earnings Code CFR and the amount will appear on the employee’s paycheck or direct deposit advice statement.
Communication to Affected Employees
PEF
A letter will be sent by the Governor’s Office of Employee Relations to affected PEF participants informing them of the tax implications.
CSEA
CSEA participants are informed of the tax impact upon enrollment in the program.
Questions
Questions regarding this bulletin may be emailed to the Tax and Compliance mailbox.