Updated: Important information regarding 3% MPSERS contribution refund and former LCS employees

February 21, 2018 Update

Former LCS employees looking to complete tax forms, please see Question #4 below.

Updated ORS 3% Health Care Contribution Refund Lapeer FAQ

1.) How do I know if I have a refund coming? 

If you had reportable wages between July 1, 2010 and September 4, 2012, the 3% healthcare contribution during that period will be refunded.  All employee groups will receive an individual communication from LCS outlining your specific refund information. 

2.) When and how will I receive my refund?

We have grouped individuals, who we were informed should receive a refund from Lapeer Community Schools, into three distinct groups for purposes of refund checks. Each groups’ checks will be processed and distributed separately since each are handled slightly different for taxation and payroll processing purposes. You will receive a letter specific to your refund that will outline a schedule of payment dates and deadlines.

Employee Group Description Method of Refund Tax Reporting Method Refund Distribution Date
Group A Current LCS employees (both active and on leave) Separate Paycheck W-2 March 12 – March 14 at ASC. Anything not picked up by March 14, 2018 will be sent via US Mail.
Group B Previous/Retired LCS employees Separate paycheck W-2 Sent Via US Mail by April 13, 2018
Group C Deceased LCS former employees Accounts Payable Check 1099 Sent Via US Mail by April 30, 2018

 

3.) Will my refund be subject to FICA/Medicare taxes?

Yes.  The refund will be partially taxed. Your individualized specific refund information is communicated in individual letters sent to current and former employees. These letters contain information regarding your taxable and non-taxable portions.  Lapeer Community Schools did subject the first (9) pays to FICA taxes, but not (federal/state/local). The remaining 48 pays were not subject to ANY tax (FICA/federal/state/local) withholdings; therefore, when refunding your money, a portion of the Base Refund will be subject to taxes being withheld.

Please note that the ORS Interest amount is not required to be taxed by the district because it is under the $600 IRS threshold. You as a taxpayer are still responsible for reporting interest income on your personal 2018 tax returns.

4.) How will the refund amount be taxed?

For Current LCS Employees (Group A) the district is treating the “refund” as a supplemental pay and taxes will be at a flat 22% as required by IRS regulations. There is no ability or need for any staff member to change their current withholding allowances.

For Former LCS Employees (Group B), The district will be issuing a supplemental check to return your ORS 3% amounts. Following IRS regulations, when there are no regular wages and supplemental wages must be paid, employers use the aggregate method, and the daily/miscellaneous tables for withholding calculations.  

As a former employee, if you wish to be taxed on something other than, Single with 0 dependents, you will need to complete a Federal (W-4) and State (MI-W4), which can be found from the following links: 

Forms must be printed, completed and sent back, being received no later than March 23, 2018 to:

ORSrefundinfo@lapeerschools.org

or

Lapeer Community Schools

Attention: Payroll – ORS REFUND

250 Second Street

Lapeer, MI 48446 

Individuals not returning W-4 forms by March 23rd will be treated as Single with 0 dependents for tax withholding purposes.

5.) Do I have to receive my entire refund via check less taxes withheld or can I make contributions to a retirement account or Health Savings Account?

All current employees (Group A) will have the opportunity to elect deferrals to either a 403(b) or a 457(b) one-time election for purposes of the 3% refund only.  Additionally, they will be able to also elect an extra one-time H.S.A. deduction if they qualify. To select a one-time contribution to either a retirement account or H.S.A account, current employees (Group A ONLY) can find the necessary forms on the LCS website under Administration, Human resources, 3% For Current Employees link. Forms must be completed and returned to ORSrefundinfo@lapeerschools.org no later than February 23, 2018.

All former employees (Group B) will be required to receive their refund via a check with the appropriate tax withholdings. We are not allowing any contributions into a retirement account or Health Savings Account for former employees. 

6.) How did the district handle the monies received from ORS on January 22, 2018?

The district immediately deposited the dollars into a NON-INTEREST bearing account, as we are just the custodian of the monies until we received final direction from MDE, ORS, Auditors and Legal Counsel on how to properly distribute the refunds. Lapeer Community Schools intends to distribute the refunds as quickly as possible to individuals.

7.) Where can I find the latest information about the refund?

We will continue to post the latest information to this district website. You should refer to your individual communication for amounts and information of your refund. You may also visit the ORS website for the latest information communicated by ORS at http://www.michgian.gov/orsschools. Finally, you may also  log into your ORS miAccount to review information specific to you at, MI Account.

Please direct any additional questions that are not addressed above to Erin Miracle in the Payroll department. If you are a former LCS employee who worked for the District between the years of 2010-2012, and you have not already verified your address with the district, please send an email to lmcaley@lapeerschools.org and include your current mailing address.

 

February 13, 2018 Update:

LCS has finally received the necessary guidance regarding the PA 75 3% ORS Health Care Contribution Refund and therefore we are ready to move forward and communicate the next steps in the process.  

We have grouped individuals, who we were informed should receive a refund from Lapeer Community Schools, into three distinct groups for purposes of refund checks.

Group A – Current LCS employees (both active and on leave)

                    Group B – Previous/Retired LCS employees

                    Group C – Deceased LCS former employees

Each groups’ checks will be processed and distributed separately since each are handled slightly different for taxation and payroll processing purposes.

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We will be providing further communications to each group in the coming weeks either through email or US Mail. Your next communication will include specific refund amount information and directions regarding and necessary next steps.

ORS 3% Health Care Contribution Refund Lapeer FAQ

1.) How do I know if I have a refund coming? 

If you had reportable wages between July 1, 2010 and September 4, 2012, the 3% healthcare contribution during that period will be refunded.  You will be receiving an individual communication from LCS outlining your specific refund information in the next week or so. 

2.) When will I receive my refund?

This will depend on which Group you fall into and the date you return the required forms. You will receive a letter specific to your refund in the very near future that will outline a schedule of payment dates and deadlines.

3.) How will I receive my refund?

 All refunds for each Group will be in check form, via a separate payroll. 

4.) Will my refund be taxed?

Yes.  The refund will be partially taxed. Your individualized specific refund information that will come next week will have your taxable and non-taxable portions outlined.  Lapeer Community Schools did subject the first (9) pays to FICA taxes, but not (federal/state/local). The remaining 48 pays were not subject to ANY tax (FICA/federal/state/local) withholdings; therefore, when refunding your money, a portion of the Base Refund will be subject to taxes being withheld.

5.) Do I have to receive my entire refund via check less taxes withheld or can I make contributions to a retirement account or Health Savings Account?

All current employees will have the opportunity to elect deferrals to either a 403(b) or a 457(b) one-time election for purposes of the 3% refund only.  Additionally, they will be able to also elect an extra one-time H.S.A. deduction if they qualify.

All former employees will be required to receive their refund via a check with the appropriate tax withholdings. We are not allowing any contributions into a retirement account or Health Savings Account for former employees. 

6.) What should I expect next?

You will receive a communication in the very near future with your specific refund amount.  Please read it carefully for next steps and timelines.

7.) How did the district handle the monies received from ORS on January 22, 2018?

The district immediately deposited the dollars into a NON-INTEREST bearing account, as we are just the custodian of the monies until we received final direction from MDE, ORS, Auditors and Legal Counsel on how to properly distribute the refunds. Lapeer Community Schools intends to distribute the refunds as quickly as possible to individuals.

8.) For current LCS employees, how will the refund amount be taxed?

For Current LCS Employees the district is treating the “refund” as a supplemental pay and taxes will be at a flat 22% as required by IRS regulations. There is no ability or need for any staff member to change their current withholding allowances.

Please direct any additional questions that are not addressed above to Erin Miracle in the Payroll department. Thank you for your patience during the process of developing a plan to administer your refund.  

 

January 5, 2018 Update

LCS Staff Members –

We wanted to take a quick moment to update you with the latest information regarding the return of the 3% MPSERS Refund. Please note that there is a Frequently Asked Questions (FAQ) Document on the ORS website that is regularly updated. Even if you have checked it previously, we encourage you to return and review its contents as they continue to update it regularly with new information as it becomes available. Here is the link to the latest information provided by ORS regarding the refund http://www.michigan.gov/orsschools

A great deal of activity has taken place over the last two weeks. Here are a few highlights of the latest information:

  • As previously communicated by ORS, information regarding the specific amount of return for each individual as well as interest earned was sent to districts earlier this week. We have been informed that each individual in the system will receive information sometime this weekend from ORS detailing the amount of refund for the individual principal and related interest for each district you worked in during the impacted time period (July 1, 2010 – September 3, 2012).
  • We have heard that the distribution of the 3% Refund will take place to districts as planned on January 22.  Please make special note of the information contained on the ORS FAQ regarding when individuals should expect to receive their refund,  
    • “ORS will be returning the funds to districts on January 22. This does not mean that the school districts will disburse those funds on that date. They have important responsibilities for the recording and tax reporting of these refunds. Generally, you might expect your refund to come to you 60-90 days after the school receives the funds. There are several districts that have closed or dissolved since 2010. The return of those contributions may be later because a different methodology will be used to transfer those contributions.”
  • While with each day new information becomes available, there still are numerous unanswered questions particularly regarding the necessary and appropriate means for taxing the funds. We continue to await definitive direction in this area which is needed in order to distribute the funds to staff members once they are received by the district.

For now, we encourage you to log into your ORS miAccount if you have not already done so, MI Account.

We will also continue to post the latest information to the district website. Please refer former LCS staff members who may have questions to this location.

If you are a former LCS employee who worked for the District between the years of 2010-2012, please send an email to lmcaley@lapeerschools.org and include your current mailing address.

 

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