To: Employees of Gates County Public Schools
From: GATES COUNTY BOARD OF EDUCATION, FINANCE DEPARTMENT
Re: IRS Regulation #409A Deferred Compensation
The Internal Revenue Service changed the laws regarding installment pay in 2004. This regulation is known as 409A. It requires that Gates County Public Schools have in writing your election for pay (either 10 month or 12 month) PRIOR to the beginning of the 1st pay period of each school year. You do not have to fill this form out every year, only when you wish to make a change to the plan. If a change is desired, please return this form to Deborah Jordan (Central Office-Payroll) no later than July 15th.
Gates County Schools offers several choices to full-time, 10 month employees. This category includes Nurses, Teachers, Teacher Assistants, and other Certified 10 month employees. The choices offered are outlined below. Please check the box beside the choice of plan you prefer and sign/date on Page 2 along with a witness signature/date.
OPTION 1
Please pay me 20 paychecks, bimonthly for 10 months.
OPTION 2
Please pay me 20 paychecks and I will sign up for SUMMER CASH through the
State Employees Credit Union.
Option OPTION 3
Please pay me 24 paychecks, bimonthly for 12 months (installment pay).
Option #1 Payment over 10 months
Total contract price will be divided by 20 and paid biweekly over the school year. Teachers are prepaid 2 weeks and should understand that if they are not present the first day they are ineligible for prepayment under the state law. Teachers should further understand that should they be unable to fulfill their contract for any reason, they may be subject to repay those prepaid two weeks. Teacher Assistant’s pay periods begin September 15th and end June 30th of each school year. Teacher Assistants are not under the above prepayment regulations. This option means that you can choose to change your direct deposit form to save for the summer on your own (i.e. not using summer cash) should you choose to do so.
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Option #2 Payment over 10 months with Summer Cash
Total contract price with be divided by 20 and paid biweekly over the school year. Teachers are prepaid 2 weeks and should understand that if they are not present the first day, they are ineligible for prepayment under state law. Teachers should further understand that should they be unable to fulfill their contract for any reasons, they may be subject to repay those prepaid two weeks. Teacher Assistant’s pay periods begin September 15th and end June 30th of each school year. Teacher Assistants are not under the above prepayment regulations. All persons choosing this option are obligated to go to the STATE EMPLOYEES CREDIT UNION to open a Summer Cash Account. You must be a member of the State Employees Credit Union to open this account. You must send us written confirmation of the amount you wish to contribute to the account monthly no later than August 1st. This amount is POST-tax, meaning that it comes out of your pay after you have been taxed thus avoiding 409A regulation issues.
Option #3 Traditional Installment Pay
Total contract price will be divided by 24 and paid biweekly over 12 months. Teachers are prepaid 2 weeks and should understand that if they are not present the first day, they are ineligible for prepayment under state law. Teachers should further understand that should they be unable to fulfill their contract for any reasons, they may be subject to repay those prepaid two weeks. Teacher Assistant’s pay periods begin September 15th and end June 30th of each school year. Teacher Assistants are not under the above prepayment regulations. Gates County Schools will not be responsible for any taxes that may be owed on anyone’s behalf for any reason under this option.
I, ______have read and understand the options as outlined above. Furthermore, I have chosen the irrevocable option and understand that I do not have the right to change my mind during the current year.
Prepaid staff only: I ______have read and understand the terms of accepting prepayment from Gates County Public Schools.
Signed, ______Date______
Witnessed, ______Date______