Lump-Sum Payment Questions
- How will I receive my 50% lump-sum payout?
If you pick the option for a 50% payout, you will receive a check from non-state
funds within 2 months after Title F Leave end or your Retirement/Resignation date.
- Will federal and state withholding (taxes) be withheld from the payout?
The "Lump Sum Payout" is considered Supplemental Wages according to the IRS. Supplemental
wages are wage payments to an employee that are not part of regular wages and will
be taxed separately from your regular wages.
Tax rates for Supplementary Wages paid separate from regular wages in 2011 are as
follows; *rates subject to change
* Federal Income Tax Withholdings = 25%
* NY State Tax Withholdings = 9.77%
* Social Security = 4.2% (up to 106,800 of taxable wages)
* Medicare = 1.45% You may wish to consult with a financial analyst, CPA or income-tax
professional, about how this payment will affect your personal income-tax liability.
- Will my lump-sum payment be based on my salary including the "chair stipend/location
pay", "also receives" or "extra service" I'm currently receiving?
No. The lump-sum payment will be calculated based on your base salary as of March