Revisions in Benefits Tax Data
Recently, some changes in data regarding Penn faculty and staff benefits taxation came into effect. Please note the following revisions as they affect you. For additional information, contact your individual benefits administrator.
A. To Participants in the Basic and/or Supplemental Tax-Deferred Annuity Plans
The maximum deferral limit of $9,500 in 1997 will be raised to $10,000 effective January 1, 1998. This limit refers to the maximum amount of pretax salary that you may legally defer into your Tax-Deferred Annuity Plan(s) in a given calendar year. This does not take into account any individual maximum exclusion allowance or catch-up provision that may apply to some participants.
Please contact your benefits counselor if you have any questions regarding this change.
B. To Participants in the Pre-Tax Health Care and Dependent Care Expense Accounts
A notice was issued late this year by the state of Pennsylvania exempting the following from state income tax retroactive to January 1, 1997:
(1) Contributions to pre-tax health care spending accounts; and
(2) Medical and dental premiums.
This change does not affect dependent care account contributions which remain taxable.
Any state taxes overwithheld as a result of this change may be claimed as a refund when you file your 1997 personal income tax return. The 1997 W-2 information, which will be released by the Payroll Department at the end of January, 1998, will reflect your appropriate taxable compensation for Pennsylvania personal income tax purposes as well as the actual tax withheld.
C. To Group Life Participants Affected by the IRS Imputed Income
The December payroll (for monthly paid employees) or the December 12 payroll (for weekly paid employees) will reflect the IRS imputed income on the following life insurance coverage:
Applicable city and FICA/Medicare taxes will also be withheld.
--Division of Human Resources