State Agencies Bulletin No. 1200

Subject
Certification, Licensure and Exam Fee Reimbursement (CLEFR) for 2012 Administered by the Governor’s Office of Employee Relations (GOER), Public Employees Federation (PEF), and Civil Service Employees Association (CSEA)
Date Issued
November 7, 2012

Purpose

To inform agencies that earnings code CFR (CLEFR) will be used to process taxable fringe benefit CLEFR transactions for 2012 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 November 29, 2012. Administration paychecks dated December 5, 2012.

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.