Employees are advised of excess salary limitation on the Teachers' Retirement System defined benefit plans set by the Internal Revenue Service (IRS) for each year when reporting salaries to the plans. 26 U.S.C. 401(a)(17) defines the maximum salary requirements. The maximum for contribution reporting for 2016 is $265,000. Contributions from employee accounts must stop once the maximum salary level has been reached. Excess contributions cannot be accepted by the plans and will result in a refund to you through adjustments via the payroll process.
You should be informed by your employer if your employer determines you will likely exceed the salary limits for the year. Ceasing contributions to the PERS will increase your taxable income for the year.
Limits for the current and prior years were:
The Division is currently reviewing member accounts to identify any members who may have exceeded the limits in past years. If you are identified in this process, any excess contributions taken in years past will be refunded to you with interest. The refund represents taxable income and employees will be issued a Form 1099 for the tax year in which the refund and interest are received.