While I was away in Myanmar (Burma), PERS sent out letters to those people it thinks are not eligible for continuance of the income tax subsidy. Predictibly, a few long-time Oregonians were caught in the dragnet and they are busily trying to get PERS to undo their mistake. Worse, in my last message before leaving for Myanmar, I had specifically emailed PERS to clarify what the effective date of the change would be. I posted, based on PERS’ response, that the first check to be affected by the change would be the check received on February 1, 2014 (for January 2014). However, the same letters out-of-staters received while I was gone tell retirees that the effective date will be the check received on January 1 (or 2nd), 2014. So, I must apologize if the information I provided in my last post misled anyone. I am trying to get clarification from PERS now, and I will update this post if I hear anything that either supports my original post or contradicts it. In the meantime, I am profoundly sorry that my post might have been misleading. I thought I had the information correct (and I confirmed it by rereading the email PERS sent me).
UPDATE: I just heard back from PERS. The official start date for the reduction in benefits due to loss of the Income Tax subsidies (SB 656 or HB 3349) is for the check to be received on JANUARY 1, 2014. The original date I posted did NOT come to me via a direct communication with PERS. I should have followed my usual course of action to “trust, but verify”, but in this case I relied on information gleaned from a usually reliable source who had posed this question to three different PERS Customer Service representatives. In my haste of getting ready for my trip, I did not follow this up with a clarifying or confirming email to PERS. I accept total responsibility for my failure to verify and apologize profusely to anyone seriously misled by this information. It did not come from an “official” PERS source, but I do believe that this information came from PERS representatives who were not looped in on the conversation. Again, my apologies.
17 comments:
What luck?
The extra month before the out of state subsidy ended.
I moved out of state in April 2013. Will January 2015 be the date of my reduction of pay? Will I receive a letter from PERS at that time?
Out of state: if PERS is using the department of revenue's database to determine your tax status, then I would assume that in April of 2013, you filed Oregon taxes as a full-year resident for 2012? Unless you filed a change of address with PERS when you moved, PERS would have no other way of determining your domicile until 2014 when you go to file a part-year Oregon Tax return for the three or 4 months you lived here during 2013. At that point DOR will flag your tax return for possible notification to PERS later in the year. That would make the trigger date for loss of the out of state sybsidy jan 1, 2015.
Thank you. Yes, I filed 2012 as full-year resident--2013 will be part-time. Is there a formula for determining the financial impact? Thank you for your help and all the information you provide.
i am one of those "long time Oregon residents" caught in their "mistake." I have lived and worked and paid taxes to Oregon uninterupted since 1980. I asked the customer service rep to help me understand who had "notified" them that I did not pay taxes and did not live in Oregon, and they said "Oregon Dept. of Revenue." Apparently, because I filed an extension and did not file 2012 taxes until October 15 of this year (instead of April 15), the State decided I had moved away??? but worst of all, when I asked if I would be refunded the money, she said she didn't know, because the benefits department had not decided yet if they would reimburse. How would that be legal--i.e., how would that not be "theft?" On the other hand, it could be that this particular rep was simply not able to provide accurate info....
These stories concern me, for if PERS is going to rely on the Department of Revenue's tax database, there has to be some way to determine an individual's status by means other than whether they paid taxes in the immediate previous year. There are compelling reasons why an individual might not have paid taxes YET, and also reasons why an Oregon resident might not owe taxes at all. This problem needs to be sorted out in such a way that individuals do not have to requalify every year, or worry that DOR will not have an accurate listing. This burden should fall to PERS, not DOR.
I too received this letter and immediately contacted PERS that day and received a form from them. I faxed it back to them immediately as I live in Oregon, breathe in Oregon...sleep in Oregon but yet today after following their instructions.....today my check was short the amount of money. Now will they reimburse me for THEIR mistake?
I too am one of those OREGON RESIDENTS that received that letter. I received it on 12/20/13 notifying me that my check will be cut. I immediately called PERS and was faxed the form. I immediately faxed it back completed. Now if you worked for the state of Oregon anything after a certain date will not affect your check. So here it is January 1st and I look at my deposit and see they have shorted me the $$$$$$ and I am pissed. Can't call anyone, it's a holiday. And if what Teyuna said about reimbursing us is true, Pers just made some money. I think a class action lawsuit should be filed on this. One of the main reasons.... Their information was inaccurate, not enough time to respond to their letter, etc.
Also it did not start in the February 1, 2014 check, it was on my check today January 1, 2014
Sandra: As you may have noticed, I did comment in both the comments and in the update of my post that the information given me was wrong. The effective date was wrong and January 1 was the correct effective date. If the error is PERS', then it will be corrected and you will almost assuredly get your money reimbursed in a timely manner. As I pointed out, the DOR is an improper place to verify residency if their lists are not updated regularly. I must ask whether you paid your 2012 taxes by April 15, 2013, or whether you put in for an extension. This seems to be the common thread in many of the cases I know about, and therein lies some of the problem. PERS needs to find a solution to this quickly so that this doesn't happen again.
For those of you who filed for an extension to October 15, a question: the feds require that you pay what you think you owe them anyway by April 15, but you have until October 15 (or is that August 15 for feds?) to get in all your paperwork, documentation, forms, etc along with any additional balance due, plus a small penalty for filing late. If things work that way for the state of Oregon, then even if you filed in October, the DOR would have a record of your request and preliminary payment for the extension. Therefore I don't understand how they could possibly not know you weren't going to pay taxes or owe them.
I can see one tricky issue; it is not mandatory to withhold Oregon income tax from your PERS check. So some people may not have Oregon withholding and may not pay quarterly taxes either. In this case, there would be at least some evidence that you might not live in Oregon if there is no record of withholding for the most recent tax year. That is why I've always insisted on having withholding taken out of my PERS monthly check. That is documentation itself that you are subject to Oregon income tax. It is a thought for some of you who are finding yourself in a bind with the DOR and PERS.
I did file an extension, so that is probably it. But I also have Oregon tax taken out of my check. Its still a bunch of whatever, I really don't think they should be using Oregon Revenue for their verification. But that is just me.
Sandra: I agree with your conclusion; in fact, I said so just before your string of comments. But, what alternatives does PERS have. Paying Oregon Income tax is one way, but suppose you make so little you aren't even required to file, much less withhold for Oregon income tax. What mechanism should PERS use to prove residency, and on whom should the burden of proof reside. This is the problem that scuttled this back in 1995 - no certain way of verifying residency. Even with vastly improved technology, the problem still exists at a smaller scale.
Thank you Marc, for remaining a primary conduit for info sharing for PERS retirees. I too filed a tax extension in 2013 because my wife and I were traveling overseas during tax season. I received a letter from pers in December (ironically addressed to my Oregon residence) telling me that since I didn't live in Oregon, I would be receiving a reduction in my benefit. I immediately called pers to inform them that I am still a resident of Oregon, and have no plans to move out of state. The friendly customer service representative told me that I needed to write a letter to pers explaining why I shouldn't be subject to the reduction in benefit. Despite my displeasure with pers and the looming prospect of a reduced benefit, I held my tongue, and insisted that the error is not mine, it is pers, and they needed to fix this issue, as I am still a tax-paying Oregon resident. She mailed me a form to check a box on and return verifying my Oregon residency, which I promptly filled out and returned. The rep told me they had been dealing with over 5000 angry Oregon residents who had also received a letter informing them they were no longer Oregon residents. I have yet to receive any communication from pers that my issue has been resolved, but suspect it may take months to get my benefit restored. Too bad pers took this route to alienate so many bona fide resident tax payers.
I did file an extension, so that is probably it. But I also have Oregon tax taken out of my check. Its still a bunch of whatever, I really don't think they should be using Oregon Revenue for their verification. But that is just me.
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Thanks for your great work, Marc. Your explanations have helped maintain my sanity through this scary, frustrating process.
And I am grateful for our Supreme Court for restoring my faith in justice, the state of Oregon and the rule of law.
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