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Date: November 16, 2010

Bulletin Number: 1035

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Subject

Certification, Licensure and Exam Fee Reimbursement (CLEFR) for 2010 Administered by the Governor’s Office of Employee Relations (GOER), Public Employees Federation (PEF), and Civil Service Employees Association (CSEA)


Purpose

To remind agencies that earnings code CFR (CLEFR) should be used for the taxable fringe benefit CLEFR and how it will be applied to certain employee’s taxable income & withholdings for tax year 2010.


Legal Reference

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

Affected Employees

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


Effective Date(s)

Institution paychecks dated December 2, 2010.
Administration paychecks dated December 8, 2010.


OSC Actions

Based on information provided by GOER, PEF and CSEA, the Office of the State Comptroller will add the value of CLEFR to the employee’s taxable wages for 2010.  The amount will be added through Time Entry using earn code CFR.   This amount is for tax withholding and reporting purposes only; no additional compensation is given to the employee.  CFR is subject to Federal, State, Local, Social Security and Medicare Taxes. “CFR” and the amount will appear on the employee’s paycheck stub or direct deposit advice statement; “FRB” will appear on the employee’s Form W-2 in box 14 with the CLEFR amount.


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


Questions

Questions regarding this bulletin may be emailed to the Tax and Compliance mailbox.