It is likely that all or a portion of your separation refund will be taxable. SURS is required by the IRS to withhold federal income tax on cash distributions of $200.00 or more.
In addition, if you have not yet attained the age of 59½, or you are less than age 55 at termination date, your refund may be subject to an IRS early distribution tax of 10% of the taxable portion. The 10% tax is not withheld by SURS. The tax is calculated on Form 5329, to be filed with your federal tax return for the tax year in which you receive your refund.
For more detailed information, visit the IRS website or view the Special Tax Notice on this website.