Answers to Frequently Asked Questions
Regarding April, 2009 Changes
in Withholding Tax Tables

1. Why is my monthly retirement check larger?

-The IRS required, as of April 1, 2009, implementation of new income tax withholding tables due to changes in the tax law.

-The changes were mandated by the American Recovery and Reinvestment Act of 2009 (also known as the "economic stimulus plan").

-For those retirees having federal taxes withheld from their monthly DERP benefit payments based on the tax tables (e.g., marital status and the number of exemptions claimed), the effect will be a decrease in the tax withheld and a corresponding increase in the monthly payment.

-Withholding amounts will not change for members who have elected to have a specific percentage or flat dollar amount withheld.

2. Do I need to submit a new withholding form to DERP?

-You do not need to submit a new withholding form since the changes were automatically made on your April 1, 2009 benefit check.

-Members should review the revised withholding amounts in light of their individual financial and tax circumstances.

-If you wish to increase or reduce the amount of taxes being withheld, you may submit a new withholding form, but you are not required to do so.

3. Will I owe taxes to the IRS or be eligible for a refund from the IRS because of these new tax tables?

-Because every situation is different (a member may be employed by one or more employers in addition to receiving a benefit from DERP, a member's spouse may be working, a member may be receiving one or more additional retirement benefits, etc.), DERP and its staff cannot give tax advice to our members.

-We encourage anyone with questions to seek advice from a qualified tax professional.

For additional information and assistance members can also visit the IRS website (www.irs.gov) and use the Withholding Calculator, review the Tax Tables found in Publication 15-T, or refer to IRS Publication 919 (How Do I Adjust My Tax Withholding?).