(a) A disability retiree who applies for disability retirement after August 31, 2007, and whose effective date of retirement is after August 31, 2007, shall report to TRS compensation earned for work performed during disability retirement in accordance with this section.

(b) A disability retiree is not subject to the reporting requirement for compensation earned in a calendar year in which the disability retiree's annual gross disability retirement annuity payments from TRS total $2,000 or less.

(c) Unless excluded under subsection (a) or (b) of this section, a disability retiree is required to report to TRS compensation earned in a calendar year when the compensation exceeds the greater of the disability retiree's highest salary in any school year before disability retirement or $40,000.

(d) The reporting requirement applies to compensation earned in the first full calendar year that begins following the effective date of disability retirement and to compensation earned in each subsequent calendar year of disability retirement.

(e) Compensation that is required to be reported to TRS is payment, earnings, or net income for employment, work, labor, or services, whether performed for a Texas public education institution or another employer or entity. Compensation includes but is not limited to the following:

(1) "Wages" as defined under §3121 of the Internal Revenue Code of 1986 that are subject to Federal Insurance Contributions Act ("FICA") Social Security or Medicare employment taxes;

(2) Salary and wages, even if not subject to FICA taxes because of a technical exclusion of a type of employer or type of employment;

(3) Self-employment earnings, including net income from a trade or business;

(4) Compensation for work performed as an independent contractor;

(5) Net income earned as a sole proprietor or partner in a business; and

(6) Net income earned as an S corporation shareholder.

(f) A disability retiree shall submit a report required by this section to TRS after the end of the calendar year in which the compensation was earned but no later than May 1 of the calendar year following the year for which the report is due. A disability retiree shall submit all required information in the format designated by TRS.

(g) TRS may audit the compensation report of a disability retiree and require the disability retiree to provide supporting documentation, including copies of tax returns, W-2 forms, 1099 forms, and employment payroll records as necessary to verify the accuracy of a compensation report.

(h) TRS may obtain information from other sources with regard to the compensation earned by a disability retiree in order to administer applicable requirements.

(i) A report is due under this section for a calendar year in which one or more annuities have been forfeited pursuant to §31.32 of this title (relating to Forfeiture of Disability Retirement Annuity Payments Due to Excess Compensation).

Source Note: The provisions of this §31.31 adopted to be effective November 1, 2021, 46 TexReg 6940