Purpose:

The purpose of this bulletin is to inform agencies of the processing of the taxable fringe benefit CLEFR for 2023.

Affected Employees:

Employees who participated in the PEF or CSEA Certification, Licensure, and Exam Fee Reimbursement Program, or who used Empire Star Public Service awards for certification, license, or exam fees are affected.

Background:

Pursuant to Internal Revenue Code Section 61, certain fringe benefits such as the Certification, Licensure, and Exam Fee Reimbursement are considered taxable income.

Effective Dates:

Effective Administration paychecks dated 11/22/2023, and Institution paychecks dated 11/30/2023.

OSC Actions:

OSC will process CLEFR transactions as submitted by OER 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 employees’ 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 1.95975% 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 Paycheck/Advice Communication to Affected Employees:

The Earnings Code CFR and the amount will appear on the employee’s paycheck or direct deposit advice statement.

PEF

A letter will be sent by the Office of Employee Relations to the affected PEF participants informing them of the tax implications. 

CSEA and Empire Star Public Service awards

CSEA and Empire Star Public Service participants are informed of the taxability upon enrollment in the program.

Questions:

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