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Enhanced Reporting

Reporting Member Contributions

Enhanced Reporting

You report contributions through the file upload process using transaction 3, or through manual reporting. Member contributions are calculated on each employee’s full gross salary (which you report to NYSLRS).

For information about how much your NYSLRS employees contribute (including information about voluntary contributions for eligible members), please see the Member Contributions page.

Contribution Refunds

If you reported and paid for more contributions than are owed, you can request a refund of contributions by submitting an adjustment using a paper adjustment form.

The contributions will be returned to you if identified within one year of when the overpayment occurred. You will be credited for the amount of the overpayment and responsible for refunding the member and correcting their W-2 form as applicable. NYSLRS is prohibited by the IRC from returning overpaid contributions after one year.

Federal Tax Treatment of Member Contributions

For tax purposes, member contributions are treated as employer contributions under Section 414(h) of the Internal Revenue Code (IRC). Federal income tax on these contributions is deferred until they are distributed when the employee withdraws or retires.

These contributions are considered wages for Social Security purposes, subject to New York State and local income tax, credited to the member’s account and accrue interest.

Additional information that may affect your present or future payroll processing for Section 414(h):

  • Contributions are not reportable as wages for federal income tax purposes.
  • Contributions are reportable wages for New York State and local income tax purposes and for Social Security purposes.
  • Contributions are reportable as wages to NYSLRS.
  • All ERS Tier 3, 4, 5 and 6 required contributions (not for service credit purchases) deducted on or after July 1, 1989, are 414(h) contributions. (Note: ERS members in Tiers 3 and 4 have reached their cessation date and no longer make contributions.)
  • For PFRS Tier 3, 5 and 6 members covered under Articles 14, 15 and 22, contributions deducted on or after October 1, 2013 are 414(h) contributions. (Section 414(h) does not apply to PFRS contributions made prior to October 1, 2013 and is not retroactive.)

If you have questions about reporting contributions, use our help desk form (select “Monthly Employer Reporting” from the dropdown).

 

Rev. 10/23