The Board requires that your monthly disability benefit check be electronically deposited into your account to avoid any delays that might occur with an interruption in mail service. The Authorization for Direct Deposit form is available on pensions.org or can be requested by calling the Board at 800-773-7752 (800-PRESPLAN) and speaking to a service representative.
Disability benefits are taxable under federal income and some state tax laws. If you are receiving disability benefits, you must complete the Tax Withholding Election form, indicating the amount of federal tax you want withheld from the disability payment, even if you do not want federal tax withheld. The form is available on pensions.org or by calling the Board and requesting it from a service representative.
Under the federal tax code, a disabled teaching elder may exclude all or a portion of a disability benefit from the gross income he or she reports on the federal income tax return as a housing allowance to the extent that it is used for housing-related expenses (housing, utilities, maintenance, and repairs). The allowance may not exceed the fair rental value of the home (furnished and including utilities).
A teaching elder must maintain financial records that document and support the income excluded for a housing allowance. He or she will receive a 1099-R form from the Board at the end of each calendar year.
Occasionally you may receive a payment greater than is allowed by the plan provisions, e.g., from Social Security initiation, workers’ compensation, or a partial return to work. When an overpayment is made, you must refund the amount to the disability fund. If you are unable to repay the full amount as a lump sum, you may sign a repayment agreement that allows for repayment over a limited time to be determined by the Board of Pensions. This monthly amount would be withheld from your monthly disability benefit.
If you do not repay the amount due or submit an acceptable repayment agreement, disability benefits will be suspended until the entire overpayment is collected. If you have a question about an overpayment, contact the Board’s Disability team immediately. Any remaining balance due to the Board upon your death will be deducted from your death benefits.