Tag Archives: federal tax withholding calculator

Federal Withholding and Your Pension

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Getting hit every year with a larger than expected federal tax bill? Or maybe you received a hefty refund. Either way, it might be time to look at how much federal tax withholding is taken out of your NYSLRS pension. If you’re not sure whether you need to adjust your federal withholding, you can check with your tax preparer or you can use this Internal Revenue Service Withholding Calculator. Remember, this is only for federal income tax. New York State doesn’t tax your NYSLRS pension and we can’t withhold state income taxes.

Understanding Your Federal Withholding

You can adjust the amount we withhold from your retirement benefit at any time. Just follow these step-by-step instructions.

  1. Print our NYSLRS Form W-4P (Withholding Certificate for Pension or Annuity Payments) from our website. (This is a fillable form, so you can type in the information before you print it out.)
  2. Fill in the top of the form with your name, address, Social Security number and NYSLRS ID.
  3. Complete the form.
    • Complete Section 1 if you do not wish to have any federal income tax withheld.
    • Complete Section 2 to have NYSLRS withhold based on current Internal Revenue Service (IRS) tax tables, your marital status and the number of federal allowances (exemptions) you claim. You can use our tax withholding calculator to estimate how much would be withheld from your pension payment every month.
    • Complete Section 3 if you completed Section 2 and also want an additional amount withheld.
  4. If you completed the form by typing in your information, print the form.
  5. Date and sign the form.
  6. Mail your form to:
    NYSLRS
    110 State Street
    Albany, NY 12244-0001

You can sign in to Retirement Online to view your current federal withholding information, including your withholding status, number of exemptions and any additional tax being withheld. You’ll also find your NYSLRS ID on your Retirement Online account page. Visit our Taxes and Your Pension page for more information.

tax

Taxes and Your NYSLRS Pension

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Tax season is here again.

In late January, NYSLRS mailed tax information to retirees (and some members and beneficiaries) so they can file their taxes.

1099-Rs

NYSLRS pensions are not subject to New York State or local income taxes, but in most cases they are subject to federal taxes. In January, we mailed 1099-R tax forms to almost 500,000 retirees who receive taxable benefits. We also mailed 1099-Rs to beneficiaries who received taxable income from NYSLRS in 2019, members who have taken taxable NYSLRS loans or have defaulted on their loans, and those who ended their membership and withdrew their contributions in 2019.

tax info - 1099-R tutorial

A 1099-R shows:

  • The total benefit paid to you in a calendar year.
  • The taxable amount of your benefit.
  • The amount of taxes withheld from your benefit.

If you didn’t get your 1099-R, you can request a reprint. This year, reprints will be available for calendar years 2017, 2018 and 2019. Your 1099-R will be mailed to the address we have on file for you. Sign in to Retirement Online to check or update your mailing address before requesting a reprint.

If you have questions about the information on the form, we feature an interactive 1099-R tutorial on our website. It walks you through a sample 1099-R and offers a short explanation of specific boxes on the form.

Changing Your Federal Tax Withholdings

If you need to make changes to your federal withholding, you can send us a W-4P form at any time. You can use this form to change your withholding status, increase or decrease the number of your exemptions, or request that an additional amount be withheld.

You can use our federal tax withholding calculator to see how these changes would affect your withholding.

Please note: If you change your withholding, it may take a few months before the changes are reflected in your pension payments. You can look up your current payment breakdown, including tax withholding, using Retirement Online.

Taxes and Your NYSLRS Retirement Benefit

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Your NYSLRS retirement benefit isn’t subject to New York State or local taxes, but it is subject to federal income tax. Before you retire, take some time to think about how taxes could affect your retirement planning.

Will Your Pension Get Taxed in Another State?

While New York State won’t tax your NYSLRS retirement benefit, other states might. If you’re thinking of moving after retirement, you’ll need to consider the tax laws of the state you move to. The Retired Public Employees Association keeps a list of which states tax pension income on their website. And remember, if you do move, we’ll need your updated mailing address for our records.

Federal Tax Withholding Status for Your Pension

taxesAfter you’ve filed for retirement, we’ll reply back to you with a confirmation letter and some forms. One of these forms will be a W-4P form (Withholding Certificate for Pension or Annuity Payments). You’ll need to fill out this form to choose the amount you want withheld from your benefit each month for federal taxes. You can choose the withholding tax status that suits you, and you can change it any time afterward by completing a new W-4P form.

If you’re not sure how much you’ll need withheld for federal taxes, consider meeting with a tax professional to assist you before submitting the form. We also offer a federal tax withholding calculator on our website to help you plan.

Getting Your 1099-R

Once you start receiving your pension benefit, we’ll send you a 1099-R form for federal income tax filing purposes. A 1099-R form lists the distributions you’ll receive from your NYSLRS pension. We mail 1099-Rs out each year by January 31, so make sure we have your correct mailing address on file. This is especially important if you plan on moving in retirement.

We also feature an interactive 1099-R tutorial on our website. It can be a helpful tool to look at the first time you receive your 1099-R.

For more about taxes and your pension, please read our Tax Information About Your Pension FAQs.