Tax Information

Federal tax withholding is optional; however, SERS benefits are subject to federal tax when filing taxes (except for Occupational Death or Disability benefits). Federal tax withholding elections can be changed at any time and as often by submitting a new W-4P form (Withholding Certificate for Periodic Pension or Annuity Payments). You cannot tax defer any portion of your pension; therefore, no deductions are allowed for IRS’s or Deferred Compensation. There is no FICA Withholding from any SERS benefit checks. A new W-4P Form will replace the current W-4P form on file, which means that we do not take the previous amount such as additional withholdings and add it to the entries of the new W-4P form. Occupational Disability and Occupational Death Benefits are not subject to federal tax.

IRS Form 1099R for benefit payments were mailed by the Office of the Comptroller during January. These benefit payments are subject to federal income tax. However, they are NOT subject to state income tax. These payments must be reported on IRS Form 1040 under "Pensions and Annuities".

IRS Form W2GI Tax Information

IRS FormW2-GI for the value of group term life insurance over $50,000 were mailed by the Office of the Comptroller. The value of the group term life insurance is subject to state and federal income tax and must be reported on state and federal tax returns.

W2-GI Reporting

If you carried basic and optional group term life insurance in excess of $50,000 during the calendar year you received SERS benefits, Box 1 "Wages, Tips, other Compensation" is taxable and reportable on your state and federal income tax returns.

The amount shown on your W2-GI is based on a formula provided by the IRS. Any questions about this formula should be presented to the IRS or your tax preparer.

Refer to the Notice to Employee section of the W2-GI for a detailed explanation of the various codes.

If you have any questions regarding your W2-GI, contact the IRS, your tax preparer, or SERS at (217) 785-7444.