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Date:January 18, 2007
Bulletin Number: 692
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Subject

Reporting of Certification and Licensure Exam Fee  Reimbursement (CLEFR) on 2006 W-2 Statements

Purpose

To advise agencies of the reporting requirement for Certification and Licensure Exam Fee Reimbursements Program provided to PEF members and Management Confidential employees

Certification and Licensure Exam Fee Reimbursements are subject to tax withholding and are required to be reported on Federal Form W-2.

Affected Employees
Employees who participate in the PEF and Management Confidential Certification and Licensure Exam Fee Reimbursement Program administered by PEF and the Governor's Office of Employee Relations.

Background

The Governor's Office of Employee Relations (GOER) was notified that the Internal Revenue Service has determined that reimbursements under the CLEFR Program do not qualify for the exclusion from gross income that applies to benefits payable under educational assistance programs.

Therefore, these reimbursements will be reported as taxable income on Federal Form W-2.  GOER provided OSC with a file identifying the affected employees and the reporting amounts.  GOER also sent a letter to affected employees informing them of the reporting requirement.

Effective Date(s)

Immediately.

OSC Actions

OSC processed the file submitted by GOER for inclusion in employees' 2006 W-2 Statements in boxes 1, 5, and 16 (and where applicable, in boxes 3 and 18).  The amount will also be identified in box 14 of Form W-2 as “other” income, coded as FRB. If an employee also received a taxable fringe benefit for an employer-provided vehicle, both benefits will be included in the total amount reported in box 14 under the FRB code.

Agency Actions

No agency action required.

Questions

Questions regarding this bulletin may be directed to the Payroll Deductions mailbox.