Summary Plan Description

Income Tax

Vacation Plan contributions are after-tax amounts withheld from your wages. Therefore, you have no further tax obligation on those contributions. However, all dividends paid to your account are considered taxable income. Qualstar Credit Union will send you with a 1099 Interest form by January 31 of each year. This form lists your dividend earnings from this account for the preceding year.

Your Qualstar account is considered "earned income." Therefore, the Internal Revenue Service can garnish these wages to pay back taxes. A lien can also be placed on the money for other reasons such as child support. No withdrawal can be made when these restrictions are imposed.