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10.10.01: Purchases made by reporting units on behalf of employees

10.10.01: Purchases made by reporting units on behalf of employees

ORS accepts payments from reporting units on behalf of its employees for purchase of active duty military service credit and/or payment for a repayment of a refund, contributions for pre-1992 weekly workers' compensation, and MIP window buy-back. Reporting unit purchases made on behalf of employees should not be confused with tax-deferred payments (TDP) withheld from employee wages.

These reporting unit pretax purchases are covered by the following rules:

  • A service credit purchase made by the employer through a TDP agreement on behalf of the employee is a fringe benefit and is not to be reported as compensation. Do not remit employer retirement contributions for these payments. See section 4.02 Nonreportable compensation: Fringe benefits.
  • These payments are considered employee rather than employer contributions toward retirement and should be reported as a TDP deduction (DTL3 record) on your retirement detail report.
  • Make these payments on the Employer Reporting website under the Payments section by choosing the DB Contributions and TDP Cash Receipt Type.

Note: Do not try to pay off the balance more quickly by submitting TDP payments outside of the normal process.

These types of payments must be reported to the IRS as both income and deferred wages on your employee's W-2 form.

Last updated: 09/29/2017