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Purpose of Form BA-9
Whenever you make separation allowance or severance payments to an employee,
such payments are to be reported to the RRB on
Form BA-9
 , "Report of Separation
Allowance or Severance Pay". This report is needed to establish a
disqualification period for unemployment and sickness benefits and to calculate
any Separation Allowance Lump Sum benefit due at retirement. Information on Form
BA-9 may also be used to make deemed service month determinations.
Separation
Allowance Paid With Other Payments
If both a separation allowance and some other payment are being paid at the
same time, it is preferable if the two payments are issued separately. This will
make clear to both the employee and the RRB, the amount of separation allowance
which is subject to Tier II tax. If a separation payment and another payment are
combined, the Tier II tax on the pay receipt may not agree with the amount
reported on Form BA-9 as subject to Tier II tax. Any such differences must be
resolved. Separate payments will help to prevent unnecessary inquiries to the
employer for clarification.
Form BA-9 Filing
Instructions
Form BA-9, Report of Separation Allowance or Severance Pay, is due at the RRB
no later than the last day of the month following the end of the quarter in
which the separation or severance was paid. For example, reports of payments
made during April through June 2007 were due at the RRB no later than July 31,
2007. While the filing of quarterly reports is required, you may file more
often. It may be more convenient to file the forms on a monthly basis or each
time you make a separation or severance payment.
Detailed instructions for completing Form BA-9 are located on the form.
Failure to File
Form BA-9 Timely
It is important that you file Form BA-9 timely because benefits under both
the RUIA and RRA may be affected. If you fail to file Form BA-9 timely:
- no disqualification period will be established;
- RUIA benefits may be paid improperly; and
- the employer’s RUIA contribution rate will be erroneously inflated.
Adjustments
Adjustments to report severance pay are made on Form BA-9 also. Instructions
on the reverse side of the paper form explain how to complete a Form BA-9 for an
adjustment.
Incorrect Usage
of Form BA-9
Do not use a Form BA-9 to do the following:
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Update an employee’s service and
compensation record. |
The creditable
compensation that results from a
separation allowance or severance
payment must be reported as regular
compensation on Form BA-3a, or on
Form BA-4, as appropriate. |
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Report miscellaneous compensation |
Separation allowance
or severance pay may become
miscellaneous compensation if
payment meets all of the conditions
of miscellaneous pay as described in
Part IV, Chapter 2 |
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Report a monthly dismissal allowance |
See the explanation
of dismissal allowance in
Part IV, Chapter 7. |
Form BA-9 Earned vs.
Paid Reporting
There are no special instructions for completing Form BA-9 to report
Severance Pay/Separation Allowances, based on whether you report compensation on
an earned or paid basis. This is because it is assumed, prior to completing Form
BA-9; you have already correctly taxed and reported the separation allowance
using the method (earned/paid) you have chosen. You then report on Form BA-9 the
amount of the separation allowance that was already subject to tax and the
amount that was already reported as compensation for the reporting period. If
the separation allowance was paid out over a period, it may be necessary to file
more than one Form BA-9.
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