I have the opportunity to get "bought out" either this June, next June or this December. My original plan in taking this job was to retire when I got 15 years in, which would have been several months back, but that program kinda evaporated.
I have some questions that maybe someone who has been through this might be able to answer (since I've been through almost everyone at the IRS and......). There are two facets to the buy out. The incentive payment and the payoff. The incentive is unearned income by everything I can gather. The payoff is what I am entitled to anyway which would be my salary to date and unused vacation (which will probably be 8 weeks). The employer is telling me that my vacation pay would also be unearned income and not eligible to be sheltered in a 403b. I had read somewhere that sick pay and vacation pay when received within 2 1/2 months of separation are considered earned income. Does anybody have experience with this?
I have some questions that maybe someone who has been through this might be able to answer (since I've been through almost everyone at the IRS and......). There are two facets to the buy out. The incentive payment and the payoff. The incentive is unearned income by everything I can gather. The payoff is what I am entitled to anyway which would be my salary to date and unused vacation (which will probably be 8 weeks). The employer is telling me that my vacation pay would also be unearned income and not eligible to be sheltered in a 403b. I had read somewhere that sick pay and vacation pay when received within 2 1/2 months of separation are considered earned income. Does anybody have experience with this?