RAAUZYUW RUDIDFB1700 3381600-UUUU--RHMCSUU. ZNR UUUUU R 031600Z DEC 09 ZYB FM DFAS CLEVELAND OH//JFLB// TO AIG 4730// AIG 4676// AIG 4678// BT UNCLAS //N07220// MSGID/GENADMIN/DFAS-CL-JFLB// SUBJ/END OF YEAR (EOY) PROCESSING INFORMATION FOR RESERVE PAY// MILITARY PAY ADVISORY 49/09// POC/MPO-CL CODE JFLB/COMM (216) 522-5121/DSN 580-5121// RMKS/1.  THE PURPOSE OF THIS MESSAGE IS TO PROVIDE INFORMATION REGARDING END OF YEAR (EOY) PROCESSING PROCEDURES FOR TAX RELATED ITEMS FOR RESERVE PAY MEMBERS. 2.  THE LAST DAY TO PROCESS TAXABLE ENTITLEMENTS FOR INCLUSION ON THE TAX YEAR 2009 W2 IS 16 DEC 2009 BY 1900 EASTERN STANDARD TIME (EST). TAXABLE ENTITLEMENTS THAT ARE PROCESSED ON OR BEFORE 16 DEC 2009 WILL BE INCLUDED IN THE MEMBERS’ 2009 W2.  IAW IRS REGULATION, TAXABLE ENTITLEMENTS THAT PROCESS AFTER 16 DEC 2009 WITH EFFECTIVE DATES FOR TAX YEAR 2009 WILL BE PAID IN CALENDAR YEAR 2010 AND WILL BE INCLUDED IN MEMBERS’ 2010 W-2. EXAMPLES: A.  MEMBER PERFORMS DRILLS FOR THE PERIOD OF 12 AND 13 DEC 2009.  THE DRILLS ARE SUBMITTED ON OR BEFORE 16 DEC 2009 AND SUCCESSFULLY POST TO THE MEMBER'S PROCESSED TRANSACTIONS. THE DRILLS WILL BE PAID IN MEMBER'S CHECK DATED 31 DEC 2009. TAXABLE INCOME AND TAX WITHHOLDINGS WILL BE INCLUDED IN THE MEMBER'S 2009 TAXES. B.  MEMBER PERFORMS DRILLS FOR THE PERIOD OF 12 AND 13 DEC 2009.  THE DRILLS ARE SUBMITTED AND POST TO THE PROCESSED TRANSACTIONS ON 29 DEC 2009 AND WILL BE PAID IN MEMBER'S CHECK DATED 06 JAN 2010.  TAXABLE INCOME AND TAX WITHHOLDING WILL BE INCLUDED IN THE MEMBER'S 2010 TAXES. 3.  COMBAT ZONE TAX EXCLUSION (CZTE) PROCESSING. A.  ALL CZTE TRANSACTIONS PROCESSED ON OR BEFORE 16 DEC 2009 FOR CALENDAR YEAR 2009 WILL REDUCE MEMBER’S TAXABLE MONTHLY WAGES AND WITHHOLDING FOR TAX YEAR 2009 AND WILL BE INCLUDED IN MEMBER’S INITIAL 2009 W2. THIS INCLUDES CZ REPORTS FOR THE MONTH OF DECEMBER. B.  CZTE TRANSACTIONS SUBMITTED FOR CALENDAR YEAR 2009 THAT ARE PROCESSED AFTER 16 DEC 2009 WILL REQUIRE A CORRECTED W2 TO BE PROCESSED BY MPO-CL RESERVE CENTER.  THIS WILL CREATE A DELAY TO THE MEMBERS RECEIVING A CORRECTED W-2.// BT #1700 NNNN