Purpose of Form BA-9
Whenever you make separation allowance or severance payments to an employee,
such payments are to be reported to the RRB on
Form BA-9
,
Report of Separation Allowance or Severance Pay. This report is needed to
establish a disqualification period for unemployment and sickness benefits and
to calculate any Separation Allowance Lump Sum benefit due at retirement.
Information on Form BA-9 may also be used to make deemed service month
determinations.
Separation Allowance Paid With Other
Payments
If both a separation allowance and some other payment are being paid at the
same time, it is preferable if the two payments are issued separately. This will
make clear to both the employee and the RRB, the amount of separation allowance
which is subject to Tier II tax. If a separation payment and another payment are
combined, the Tier II tax on the pay receipt may not agree with the amount
reported on Form BA-9
as subject to Tier II tax. Any such differences must be resolved. Separate
payments will help to prevent unnecessary inquiries to the employer for
clarification.
Form BA-9 Filing Instructions
Form BA-9
,
Report of Separation Allowance or Severance Pay, is due at the RRB no later than
the last day of the month following the end of the quarter in which the
separation or severance was paid. For example, reports of payments made during
April through June 2007 were due at the RRB no later than July 31, 2007. While
the filing of quarterly reports is required, you may file more often. It may be
more convenient to file the forms on a monthly basis or each time you make a
separation or severance payment.
Detailed instructions for completing Form BA-9 are located on the form.
Failure to File Form BA-9 Timely
It is important that you file Form BA-9
timely because benefits under both
the RUIA and RRA may be affected. If you fail to file Form BA-9 timely:
- no disqualification period will be established;
- RUIA benefits may be paid improperly; and
- the employer's RUIA contribution rate will be erroneously inflated.
Adjustments
Adjustments to reported severance pay are made on
Form BA-9
also.
Instructions on the reverse side of the paper form explain how to note a Form
BA-9 entry as an adjustment.
Incorrect Usage of Form BA-9
Do not use Form BA-9
to:
Update an employee's service and compensation record.
|
The creditable compensation that results from a separation
allowance or severance payment must be reported as regular
compensation on Form BA-3
,
or on Form BA-4
,
as appropriate.
|
Report miscellaneous compensation |
Separation allowance or severance pay may become miscellaneous
compensation if the payment meets all of the conditions of
miscellaneous pay as described in
Part IV, Chapter 2. |
Report a monthly dismissal allowance. |
See
the explanation of dismissal
allowance in Part
IV, Chapter 7. |
Form BA-9 Earned vs. Paid Reporting
There are no special instructions for completing
Form BA-9
to report Severance Pay/Separation Allowances, based on whether you report
compensation on an earned or paid basis. This is because it is assumed, prior to
completing Form BA-9; you have already correctly calculated the taxed and
reported the separation allowance using the method (earned/paid) you have
chosen. You then report on Form BA-9 the amount of the separation allowance that
was already subject to tax and the amount that was already reported as
compensation for the reporting period. If the separation allowance was paid out
over a period, it may be necessary to file more than one Form BA-9.
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