Presentation on theme: "How Taxes Are Applied to TMRS Benefits 2007 Annual Training Seminar 2007, Texas Municipal Retirement System."— Presentation transcript:
How Taxes Are Applied to TMRS Benefits 2007 Annual Training Seminar 2007, Texas Municipal Retirement System.
Taxes Are Applied to Income: Refunds PLSDs Rollovers (tax-deferred) Monthly retirement benefits
TMRS is a Qualified, Tax-Deferred Governmental Retirement System What does “qualified” mean? Tax-deferred — NOT TAX FREE. What does “Employer pick-up” mean?
How Are Income Taxes Handled in Retirement? Pre-1984 Post-1983 — non-payroll contributions, interest, and employer funds Retiree is in control
Refunds and Partial Lump Sum Distributions (PLSDs) There is tax liability if you don’t roll over Trustee-to-trustee rollovers Rollovers to 457 accounts — you don’t lose the tax liability
Rollovers into TMRS When can TMRS accept a rollover? Where can the money come from?
Taxable Status of Disability Retirement Why won’t TMRS code a retiree’s 1099R so the IRS treats it as a disability retirement for tax purposes? The elusive “code 3” issue!
Tax Saver Credit What is it? How does this help me?
Supplemental Death Benefits Is the supplemental death benefit taxable? Does the value of this fringe benefit have to be reported as taxable wages to an employee while they are working?
Pension Protection Act of 2006 Made permanent retirement plan changes enacted in 2001 that were set to expire after 2010. Made major changes to funding rules for single and multiemployer plans (not public plans). Liberalized retirement plan distribution and rollover rules. Clarified the application of age discrimination rules on hybrid retirement plans.
HELPS Provision TMRS begins participating in the program in January 2008. Retired public safety officers may pay for their health insurance coverage from their monthly retirement annuity. TMRS makes direct payment to health insurance provider from retiree’s annuity. Up to $3,000 of the payment may be deducted on the retired officer’s tax return per year.
Retirees who were public safety officers – law enforcement, firefighter, or EMS – are eligible. Retiree’s employing city must verify status as a retired public safety employee. Call TMRS if you need more information or to request the HELPS forms. HELPS Provision (cont.)
Questions & Answers HOW TO CONTACT TMRS: Toll-free: 800-924-8677 Web: www.TMRS.com E-mail: firstname.lastname@example.org