RAAUZYUW RUDIDFB1700 3341430-UUUU--RHMCSUU. ZNR UUUUU R 301430Z NOV 10 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 47/10// 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 2010 W2 IS 15 DEC 2010 BY 1900 EASTERN STANDARD TIME (EST). TAXABLE ENTITLEMENTS THAT ARE PROCESSED ON OR BEFORE 15 DEC 2010 WILL BE INCLUDED IN THE MEMBERS’ 2010 W2.  IAW IRS REGULATION, TAXABLE ENTITLEMENTS THAT PROCESS AFTER 15 DEC 2010 WITH EFFECTIVE DATES FOR TAX YEAR 2010 WILL BE PAID IN CALENDAR YEAR 2011 AND WILL BE INCLUDED IN MEMBERS’ 2011 W-2. EXAMPLES: A.  MEMBER PERFORMS DRILLS FOR THE PERIOD OF 11 AND 12 DEC 2010.  THE DRILLS ARE SUBMITTED ON OR BEFORE 15 DEC 2010 AND SUCCESSFULLY POST TO THE MEMBER'S PROCESSED TRANSACTIONS. THE DRILLS WILL BE PAID IN MEMBER'S CHECK DATED 30 DEC 2010. TAXABLE INCOME AND TAX WITHHOLDINGS WILL BE INCLUDED IN THE MEMBER'S 2010 TAXES. B.  MEMBER PERFORMS DRILLS FOR THE PERIOD OF 11 AND 12 DEC 2010.  THE DRILLS ARE SUBMITTED AND POST TO THE PROCESSED TRANSACTIONS ON 29 DEC 2010 AND WILL BE PAID IN MEMBER'S CHECK DATED 07 JAN 2011.  TAXABLE INCOME AND TAX WITHHOLDING WILL BE INCLUDED IN THE MEMBER'S 2011 TAXES. 3.  COMBAT ZONE TAX EXCLUSION (CZTE) PROCESSING. A.  ALL CZTE TRANSACTIONS PROCESSED ON OR BEFORE 15 DEC 2010 FOR CALENDAR YEAR 2010 WILL REDUCE MEMBER’S TAXABLE MONTHLY WAGES AND WITHHOLDING FOR TAX YEAR 2010 AND WILL BE INCLUDED IN MEMBER’S INITIAL 2010 W2. THIS INCLUDES CZ REPORTS FOR THE MONTH OF DECEMBER. B.  CZTE TRANSACTIONS SUBMITTED FOR CALENDAR YEAR 2010 THAT ARE PROCESSED AFTER 15 DEC 2010 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