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Mark Anderson
Mark Anderson, Tax Attorney
Category: Tax
Satisfied Customers: 540
Experience:  Tax attorney and accountant
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Years ago I withdrew my portion of my Public employee pension

Customer Question

Years ago I withdrew my portion of my Public employee pension account when I left public service. After 5 years I returned to the public system as an employee. I have since retired from the Public Employees Retirement System and opted to redeposit the funds that I originally withdrew from the system under a 15 year plan that includes principle and interest. I asked PERS if I would receive an annual statement showing how much I paid in principal and interest and balance and I was told NO. This payment is taken out of my monthly check and is shown as being part of my GROSS income on my pension 1099. My question is can they deny me the balance of interest and principal annual breakdown and also if the interest that I am paying is tax deductible?
LAH
Submitted: 7 months ago.
Category: Tax
Expert:  Mark Anderson replied 7 months ago.
Are you sure it is deductible?http://www.fool.com/personal-finance/taxes/2004/09/17/retirement-loans-is-the-interest-deductible.aspxWhat is the name of the plan? Have you review the plans rules?
Expert:  Mark Anderson replied 7 months ago.
The plans have their own rules and procedures:http://www.state.nj.us/treasury/pensions/pdf/factsheets/fact81.pdf
Expert:  Mark Anderson replied 7 months ago.
http://www.state.nj.us/treasury/pensions/loans-home.shtml
Customer: replied 7 months ago.
Mark thank you very much........Here is more information. I totally separated from the Ca Public Employees Retirement System and I withdrew all of my contributions from the system. Therefore there was NO loan involved and I had to pay a hefty tax penalty at that time. I went back to work in the system a few years later for another 11 years. Upon retirement I was offered an option of redepositing the funds I withdrew with interest for 15 years. No loan involved just replenishing the basic account with interest. It appears that I pass the "key employee" rule since this is not a 401 or 403 but a pension plan based on the article that you sent. Is my assumption correct?
Customer: replied 7 months ago.
The original money in the account is what I put into the plan on a monthly basis from my pay-check.
Expert:  Mark Anderson replied 7 months ago.
I think your plan is a 403.
Expert:  Mark Anderson replied 7 months ago.
Did you just buy a service credit:https://www.calpers.ca.gov/docs/forms-publications/service-credit-purchase-options.pdf
Expert:  Mark Anderson replied 7 months ago.
If you think I have answered your question, then please accept my answer. Otherwise, please reply. Thank you.

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