In an email notification, state retirees were informed that their January pension checks were accidentally increased this month, as the State Employee Retirement System (SERS) failed to withhold the correct amount for federal taxes. Currently, SERS is leaving it to the retirees to correct this mistake but has offered a FAQ document on its website to help address concerns and questions.
In the SERS pension plan, withholding is used to withdraw a set amount of money from each paycheck or retirement pension that is used toward paying taxes. Thus, if a month is skipped, the annual amount withheld will be less than what taxpayers set for themselves. This means that state retirees will end up having to either pay more in taxes or receive a lower tax return when they file their taxes.
Despite this mistake, SERS will not be withholding any additional taxes in February that might compensate for the January error. They are recommending that state retirees either set aside the amount that should have been withheld from their January check personally, submit a modified W-4P form that will authorize SERS to withhold additional federal tax from future months, or contact a tax advisor to come up with another solution. In order to find out how much should have been withheld in January, retirees can check through their SERS Member Services account. Furthermore, SERS cautions that any changes in withholding may not take effect until March.
Comments are closed