Sunday, November 22, 2009

Tax Recovery Clarification

This is from the website of the Teachers Retirement System of Georgia:

"Georgia Department of Revenue Tax Recovery Adjustment"

"Recently, an email containing misleading information about member contributions and possible tax credits has been circulating around the State.
Back in January of 1990, the Georgia Department of Revenue created a “tax recovery adjustment” for TRS member contributions made from July 1, 1987 through January 1, 1990. During that period, member contributions were sheltered from federal income tax, but not Georgia state income tax. Thus, a member’s contributions and pension were taxed by the State of Georgia.
The Georgia Department of Revenue allowed TRS members, who contributed to TRS from July 1, 1987 through January 1, 1990, to “recover” the taxes paid on those contributions when they filed for their state taxes. At retirement all retirees receive this important information at the time they receive their first benefit check.
TRS members eligible for this recovery adjustment will receive, along with their first benefit check, a letter that provides the total dollar amount of TRS contributions made during this time frame so members can document the adjustment on their state tax returns. For example, a retiree who retired on July 1, 1998 received this important tax information with his/her first retirement check. In early 1999, when the retiree filed his or her state taxes for 1998, the adjustment would have been included.
To be clear, the amount shown in the letter you received is not the amount you are owed by the Georgia Department of Revenue, but is the amount of money from which you can recover the taxes you paid on it. This money has nothing to do with incorrect contribution amounts. The contributions you made to TRS during this time were and are correct.
If you fall into this adjustment period and are unsure as to whether or not you filed for this adjustment, we recommend that you go back and check your tax returns for the applicable year to avoid claiming the recovery more than once. If you already received your adjustment, then you are all set. If you did not claim the adjustment, please contact the Georgia Department of Revenue directly at https://etax.dor.ga.gov/ or 877-602-8477 to find out if you are still eligible. "

Something to ponder: what is the purpose of the Georgia Retired Educators Association? Disseminating information like that above should be a routine activity for them. My only experience with the group is that they tried to sell us long term care insurance!

1 comment:

  1. We must think alike... I have a similar post for tomorrow after I went through the TRS website on Saturday. I would like to chat with you sometime about your pending retirement to see if there is anything I have missed on my website - rschultz@rollinsfinancial.com

    Thanks,
    Robby

    ReplyDelete