VSIP and annual leave payment


Q. When I take Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay and I have annual leave, are they combined into one lump sum for tax purposes, or are they separate?

A. The VSIP and lump-sum annual leave payment are treated as earned income and taxed accordingly. The VERA has no cash value.


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.

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