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Date: November 17, 2011

Bulletin Number: 1106

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Subject

Certification, Licensure and Exam Fee Reimbursement (CLEFR) for 2011 Administered by the Governor’s Office of Employee Relations (GOER), Public Employees Federation (PEF), and Civil Service Employees Association (CSEA)

Purpose

To inform agencies that earnings code CFR (CLEFR) will be used to process taxable fringe benefit CLEFR transactions for 2011 and explain how it will affect employee’s taxable income and withholdings.

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, M/C or CSEA Certification, Licensure and Exam Fee Reimbursement Program.

Effective Date(s)

Institution paychecks dated December 1, 2011.
Administration paychecks dated December 7, 2011.

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 using FRB.

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 e-mailed to the Tax and Compliance mailbox.