Retiree tax faqs – etf wisconsin

• IRC states “…an individual shall be considered to be disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration. An individual shall not be considered to be disabled unless he furnishes proof of the existence thereof in such form and manner as the Secretary may require.”

Box 5 reflects the portion of your benefit payment(s) that are non-taxable, referred to as your “Investment in Contract (IIC).” This amount represents the recovery of your after-tax employee contributions you made to the Wisconsin Retirement System while you were an employee.

Those after-tax contributions are spread out during your lifetime resulting in your exclusion amount. The amount shown in Box 5 represents the annual portion of your retirement benefit disbursed to you that are tax-free. This amount is the difference between Box 1 (Gross distribution) and Box 2a (Taxable amount).

If you received a 1099-R from ETF, it may be because you are the person who notified ETF of the death, or are the decedent’s representative. You will need the 1099-R tax document to complete the decedent’s last federal and/or state tax returns. If you are not that person, please send the form to the person who is preparing the tax returns.

ETF issues IRS form W-2 to report wellness incentive disbursements. If you enrolled under the State of Wisconsin Group Health Insurance Program or the local It’s Your Choice plans, and you and/or your dependents received a wellness incentive payment from your health insurance carrier, you will receive Internal Revenue Service (IRS) Form W-2 from ETF reporting the amount of the wellness incentive payment you received during the calendar year. The IRS classifies these wellness incentives as fringe benefits that must be treated as taxable wages.

The Patient Protection and Affordable Care Act (ACA) is a federal law that, among other things, encourages large employers (generally 50+ employees) to offer medical insurance to certain qualified employees and their dependent children. Those employers and applicable health insurance plans must send an annual statement to all employees eligible for coverage describing the insurance available to them.

The State of Wisconsin Group Health Insurance Program provides you with coverage that, according to the ACA, meets minimum essential coverage and meets minimum value, as defined by the ACA. The ACA encourages employers to offer care that is affordable, as defined by the ACA. If it is found not to be affordable by the IRS, your employer may be asked to pay a penalty to the federal government.

If you were enrolled in Medicare for the entire year, your insurance provider will not be sending you a form. Age 65 and older retirees who are on Medicare may receive instructions from Medicare on how to report their coverage. If you enrolled in Medicare mid-year, you may receive a form from your insurance provider reporting the coverage you had while you were not enrolled in Medicare. For example, if you were enrolled in the IYC Access Plan and your Medicare Part A and Part B was effective on May 1, your provider will send you a form 1095-B reporting your coverage from January through April.