TAX WITHHOLDING AND REPORTING - UNIFORM ALLOWANCES - 8572.5

In accordance with the California Code of Regulations, Title 2, sections 599.726-599.734, the state may make an allowance for uniforms replacement.  In addition to the income reporting requirements, some uniform allowances are subject to withholding for retirement contributions. If applicable, the provisions for retirement contributions will be included in the employees’ Memorandum of Understanding (MOU). The MOUs can be located within each bargaining unit contract.

Allowance Subject to Retirement Contributions

If the MOU stipulates that the uniform allowance be subject to retirement contributions, agency/department accounting offices will not make uniform allowance payments to employees. Agency/department human resources offices will request a payroll warrant be issued through the State Controller’s Office (SCO) payroll system. The payroll system will contribute the state’s share and withhold the employee’s share of the retirement contributions. If applicable, the benefit will be reported and the employment taxes will be withheld.

Allowance Not Subject to Retirement Contributions

Agency/department accounting offices may pay uniform allowances not subject to retirement contributions. Payment may be made by issuing a revolving fund check or presenting a claim to the SCO. However, these payments are subject to the withholding and reporting requirements as provided in SAM Section 8572.