Current through Register Vol. 24-18, September 15, 2024
(1)
What is the fallen heroes tax
exemption? The department makes survivor benefit annuity payments to
qualified survivor beneficiaries of public safety officers killed in the line
of duty. All or part of the annuity benefit paid may be nontaxable under
applicable federal law1. Lump sum
payments do not qualify for nontaxable treatment under this
provision of law.
(a)
Who is
covered? Deceased public safety officers who were members of LEOFF,
PERS, PSERS and WSPRS. If the deceased officer was a member of another plan,
please contact the department or your tax advisor to discuss the
matter.
(b)
What time period
is covered?
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MEMBER'S DATE OF DEATH
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SURVIVOR BENEFIT PAYMENT DATE
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On or after January 1, 1997
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On or after January 1, 1997
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On or before December 31, 1996
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On or after January 1, 2002
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(2)
Can I rely on the department's
determination of whether the payments are nontaxable? No.
(a) The department does not guarantee that
payments should or should not be designated as exempt from federal income
tax.
(b) The department does not
guarantee that it was correct in withholding or not withholding taxes from
survivor benefit payments to you.
(c) The department does not:
(i) Represent or guarantee that any
particular federal or state income, payroll, personal property or other tax
consequence will occur because of its nontaxable determination; or
(ii) Assume any liability for your compliance
with the Internal Revenue Code.
(d) You should consult with your own tax
advisor regarding all questions of federal or state income, payroll, personal
property or other tax consequences regarding any payments you receive from the
department.
(3)
How will the department determine whether to withhold or not withhold
from your survivor benefit annuity payment for income tax purposes?
(a) If you receive survivor benefit annuity
payments because of the death of a public safety officer killed in the line of
duty, and you are the public safety officer's spouse, ex-spouse, or child, the
department will not withhold taxes on the portion
of your survivor benefit payments attributable to the officer's service as a
public safety officer.
(b) The
department will compare the service credits associated with the member's
employment as a public safety officer to the member's overall service credit to
determine the portion of the survivor benefit payment that qualifies.
(c)
Examples: In the following
examples, assume that the plan administrator has determined that the death of
the member qualifies under the fallen heroes tax exemption provision. Assume
that the monthly survivor benefit payable is $2000.
Example 1. Joe was employed as
a law enforcement officer. He spent his entire career in law enforcement from
July 1, 1976, until his death on June 10, 2003 (324 months).
Total service credit = 324 months
Service credit as public safety officer = 324 months 324 /
324 = 1.0 1.0 x $2,000 = $2,000
$2,000 is not subject to withholding
Example 2. Brian was employed as a research
analyst for a state agency from July 1, 1976, to May 30, 1995 (227 months
service credit). He was employed in a public safety officer position for
another state agency from June 1, 1995, until his death on June 10, 2003 (97
months service credit).
Total service credit = 324 months
Service credit as public safety officer = 97 months 97 / 324
= .299383
.299383 x $2,000 = $598.77
$598.77 is not subject to withholding
Example 3. Susan was hired on
July 1, 1976, as a research analyst for a state agency. She terminated that
employment on May 30, 1995 (227 months service credit). Susan was hired into a
public safety officer position on June 1, 2003, for another state agency. She
died on June 4, 2003.
Total service credit = 227.25 months
Service credit as public safety officer = .25 months
.25 / 227.25 = .001100
.001100 x $2,000 = $2.20
$2.20 is not subject to withholding (d)
What are the exceptions? Subsection (3)(a) of this section shall
not apply with respect to the death of any public safety officer if:
(i) The death was caused by the intentional
misconduct of the officer or by the officer's intention to bring about his or
her own death;
(ii) The officer was
voluntarily intoxicated at the time of death;
(iii) The officer was performing his or her
duties in a grossly negligent manner at the time of death; or
(iv) The payment is to an individual whose
actions were a substantial contributing factor to the death of the
officer.
(4)
Who will decide whether to withhold money for income tax from your
survivor benefit payments?
(a) The plan
administrator will make the decision.
(b) If you disagree with the plan
administrator's decision, you may petition for review under chapter 415-04
WAC.
(5)
What
types of evidence will the department use in making the decision regarding
whether to withhold taxes from the survivor payments?
(a) Cause of death stated on the certified
death certificate;
(b) Facts
surrounding the public safety officer's death;
(c) The deceased public safety officer's job
description;
(d) The deceased's
membership records;
(e) Materials
that the survivor submits for consideration; and
(f) Any other relevant evidence.
(6)
Examples:
(a)
Police officer: Charles is a
police officer who works for a police department in a large Washington city. He
receives a call to report to duty because a riot has started downtown. Charles
drives to the riot scene and is killed getting out of his car from a bullet
fired by a rioter. The department will not withhold taxes on survivor benefit
payments.
(b)
Firefighter:
Elaine is a firefighter who attends a barbecue party on the Fourth of
July. During the party, the barbecue falls over and the garage catches on fire.
Elaine grabs a hose and puts out the fire, but dies from smoke inhalation in
the process. The department would review the evidence and circumstances to
determine whether Elaine would be considered to be "on duty" at the time of her
death. If Elaine was not on duty, the department will withhold taxes on
survivor benefit payments.
(c)
Park ranger: Bobbi is a park ranger employed by the state parks
and recreation commission. Her job duties include administration, development,
maintenance, and visitor services, in addition to law enforcement, within a
state park or park area. She is required to have knowledge of fire prevention
and suppression methods and equipment. Although Bobbi is commissioned to
enforce laws, her principal job functions do not include criminal law
enforcement or crime control. The department would withhold taxes on payments
to her survivors unless Bobbi was actually engaged in crime control,
enforcement of criminal law, or fire suppression at the time of her
death.
(7)
Definitions used;2 these definitions apply to
this WAC section ONLY.
(a)
Chaplain - Any individual
serving as an officially recognized or designated member of a legally organized
fire department or legally organized police department, or an officially
recognized or designated public employee of a legally organized fire or police
department who was responding to a fire, rescue, or police emergency.
(b)
Child - Any natural,
illegitimate, adopted, or posthumous child or stepchild of a deceased public
safety officer who, at the time of the public safety officer's death, is:
(i) Eighteen years of age or under;
(ii) Over eighteen years of age and a student
as defined in Section 8101 of
Title
5, United States Code;
or
(iii) Over eighteen years of age
and incapable of self-support because of physical or mental
disability;
(c)
Firefighter - An individual serving as an officially recognized or
designated member of a legally organized fire department and an officially
recognized or designated public employee member of a rescue squad or ambulance
crew.
(d)
Intoxication -
A disturbance of mental or physical faculties:
(i) Resulting from the introduction of
alcohol into the body as evidenced by:
(A) A
postmortem blood alcohol level of .20 per centum or greater; or
(B) A postmortem blood alcohol level of at
least .10 per centum but less than .20 per centum unless the department
receives convincing evidence that the public safety officer was not acting in
an intoxicated manner immediately prior to his death; or
(ii) Resulting from drugs or other substances
in the body.
(e)
Law enforcement officer - An individual involved in crime and
juvenile delinquency control or reduction, or enforcement of the laws,
including, but not limited to, police, corrections, probation, parole, and
judicial officers.
(f)
Line
of duty means:
(i) Any action which an
officer whose primary function is crime control or reduction, enforcement of
the criminal law, or suppression of fires is obligated or authorized by rule,
regulations, condition of employment or service, or law to perform, including
those social, ceremonial, or athletic functions to which the officer is
assigned, or for which the officer is compensated, by the public agency he or
she serves. For other officers, "line of duty" means any action the officer is
so obligated or authorized to perform in the course of controlling or reducing
crime, enforcing the criminal law, or suppressing fires; and
(ii) Any action which an officially
recognized or designated public employee member of a rescue squad or ambulance
crew is obligated or authorized by rule, regulation, condition of employment or
service, or law to perform.
(g)
Public agency - Any unit of
government that meets the definition of "employer" in any retirement plan that
the department administers.
(h)
Public safety officer:
(i)
Regardless of full-time or part-time status, an individual serving a public
agency in an official capacity as a law enforcement officer, firefighter,
chaplain, or member of a rescue squad or ambulance crew; or
(ii) An individual who is performing official
duties in cooperation with the Federal Emergency Management Agency in an area,
if those official duties:
(A) Are related to
a major disaster or emergency that has been, or is later, declared to exist
with respect to the area under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5121 et seq.);
and
(B) Are determined by the head
of the agency to be hazardous duties.
(i)
Rescue - The provision of
first response emergency medical treatment, transportation of persons in
medical distress and under emergency conditions to medical care facilities, or
search and rescue assistance in locating and extracting from danger persons
lost, missing, or in imminent danger of bodily harm.
Footnotes to section:
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1
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The "Omnibus Crime Control and Safe Streets Act of
1968," Act June 19, 1969, P.L. 90-351, which appears generally as 42 USCS
§§ 3701 et seq., including
Title
26 U.S.C. Sec. 101(h) as
amended by the Fallen Hero Survivor Benefit Fairness Act of 2001.
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2
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These definitions duplicate, as closely as
possible, those in 42 USCS § 3796b (2003), the applicable federal
definition section. Provisions not applicable to any plans administered by the
department have been deleted.
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Statutory Authority:
RCW
41.50.050(5),
41.04.393. 06-18-009, §415-02-700, filed 8/24/06,
effective 9/24/06; 03-18-031, §415-02-700, filed 8/26/03,
effective 10/1/03.
