IMPORTANT INFORMATION BEGINNING JANUARY 1, 2007: The UC contribution paid towards PSBP benefits will be taxed according to the following guidelines. The University of California is required by IRS regulations to implement this requirement.
Postdoc Employees in 3252:
Benefits are not taxable unless the Postdoc Employee has a Domestic Partner (DP), if so just the UC contribution that pays for benefits for the Domestic Partner and/or dependents will be taxed.
Postdoc Fellows and Paid Directs in 3253 and 3254:
Benefits are taxable on the Employer-paid portion of premiums for Postdoc and covered dependents.
“US Citizens” and other “Residents for US Tax Purposes” in 3253 or 3254:
• Postdoctoral Fellows (3253) and Paid Directs (3254) are required to self-report the total annual value of their fellowships, including benefits for themselves and their dependents, when they prepare their U.S. and California income tax returns.
Non-Resident Aliens (NRAs) in 3253 and 3254:
Subject to withholding 14% (F, M, Q, and J, Visa holders) and 30% for all others. Taxes will be withheld from stipends and reported on forms 1042-S and a 592-B.
Non-Resident Aliens who are ‘Paid Directs’ (3254) will be billed for the taxes and reported on forms 1042-S and 592-B, since their stipends ARE NOT paid by the University.
Postdocs that invoke tax treaties will not be subject to withholding for federal purposes, but the benefits will be reported on form 1042-S and taxed for California purposes and reported on form 592-B.
Please note the employees in TC 3252 that do not cover a Domestic Partner and/or dependents of a Domestic Partner are not affected by the changes above.
If you have questions about general tax inquiries and IRS regulations contact your tax advisor or www.irs.gov, 1-800-829-4933, TDD 1-800-829-4059.