Friday, September 29, 2023

Retirees, new IRS tax withholding tables may affect your pension amount

Each year the Internal Revenue Service provides DRS with tables used to calculate the tax withheld from your pension benefit. If your net pension amount changes in 2018, it is likely due to the updated tax tables.

Your online retirement account includes tools to calculate and update your IRS withholding. You’ll find a link to the IRS Withholding Calculator under “Other” in the navigation menu. To change your withholding amount, select “My Account” from the menu, then “View/Edit” under the IRS Withholding Tax category. Changes will take effect in your next pension payment.

Alternatively, you can complete and send DRS a new Form W-4P. Before you make a change, you might want to talk with your financial advisor or the IRS.

If you have medical coverage through the Public Employees Benefits Board, any change in medical premiums can also affect your net pension amount. For more information, please visit the state Health Care Authority website.

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