Are refunds of accumulated contributions under either the Hybrid Plan or the Contributory Plan taxable?
A42: Federal income taxes are due on the taxable portion of a refund payment. If a participant is below age 55 (age 50 for emergency medical technicians), an additional 10% tax on the taxable portion of the refund must be paid to the Internal Revenue Service. However, participants can defer these taxes by rolling over the taxable portion of the refund into an IRA. Refunds of contributions from either the Hybrid Plan or the Contributory Plan are not subject to Hawaii income tax. Refer to the Employees’ Retirement System website, available at http://www4.hawaii.gov/ers, for further information.
