IRS ruling does not affect teachers this school year

Teachers and other school employees will not be affected with the new deferred compensation rules this school year.

IRS spokesperson Clay Sanford in Dallas said, "Many teachers are busy preparing for the start of school so we don't want them to be worried about this issue as the summer winds down."

The deferred compensation rules will not be applied to annualization elections for school years beginning before Jan. 1, 2008, so school districts and teachers will have time to make any changes that are needed.

Under the 2004 law, when teachers and other employees are given an annualization election, they are allowed to choose between being paid only during the school year and being paid over a 12- month period running from August of one year through July of the next year, rather than the August to May school year.

More information, including answers to frequentlyasked questions, is posted on IRS.gov.