If your last federal tax bill was larger than you expected, or if you received a hefty refund, it might be time to review how much federal tax withholding comes out of your NYSLRS pension. If you’re not sure whether you need to adjust your federal withholding, you may want to check with a tax preparer.
Remember, NYSLRS only withholds federal income tax. New York State doesn’t tax your NYSLRS pension, and we can’t withhold for income tax for other states.
New W-4P Federal Tax Withholding Form
The IRS released a new version of their W-4P federal income tax withholding form. For 2023, NYSLRS was required to update our tax withholding form as well.
The new form no longer allows tax filers to adjust their withholding by electing a specific number of withholding allowances. Instead, the W-4P form has fields for increasing or decreasing the amount of withholding, including fields for tax credits and deductions.
You do not need to submit the new W-4P unless you want to change the amount of your tax withholding.
To Change Your Withholding
Retirement Online makes it fast and convenient to view your current federal withholding information and make changes using our online form that collects the same information as the paper form. You can check your current withholding by signing in to Retirement Online and viewing your most recent pension pay stub. To change your federal tax withholding, click the green “Update My W-4P Tax Information” button on your Account Homepage.
If you update your withholding online by the middle of the month, your changes will generally be applied that month. We’ll notify you by mail or email (depending on your contact preference) when the update has been completed.
Completing the Form
Step 1. Select your filing status. If you want your federal withholding to be based only on the benefit amount you receive from NYSLRS, with no adjustments, you can skip steps 2 – 4.
Adjustments to Withholding (Dependents, Tax Credits)
Complete Steps 2 – 4 ONLY if they apply to you.
Step 2. If you have income from a job or more than one pension/annuity, in addition to your NYSLRS pension, or if you’re married filing jointly and your spouse receives income from a job or pension/annuity, you can enter that in Step 2.
Click “View Instructions” or see page 2 of the paper W-4P form for examples that may help you with this step.
Step 3. If you need to claim dependents, you can enter that information in Step 3.
Step 4. If you have other adjustments to make — other income, deductions or extra withholding — you can complete Step 4.
Click “View Instructions” or see page 3 of the paper W-4P form for instructions and a worksheet that may help you with this step.
If you prefer to send in a paper form, you can print, complete and submit our W-4P Withholding Certificate for Pension or Annuity Payments form to update your withholding information, however paper forms take longer to process. Please be sure you are using the new form (revised 12/22), because NYSLRS will no longer accept previous versions of the W‑4P form.
If You Receive More Than One Benefit Payment from NYSLRS
NYSLRS administers two retirement systems — the Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS). It is possible to receive more than one benefit from one or both systems — as a retiree, a beneficiary or an ex-spouse who is receiving a benefit under a domestic relations order.
Generally, your withholding is tied to the retirement system. So, if your benefits are from the same system, you only need to submit your withholding information once and your preferences will be applied to all benefit payments you receive from that system. However, if you receive a benefit from both ERS and PFRS, you’ll need to submit a W-4P form for each system.
Your benefit payment pay stub will list whether the payment is from ERS or PFRS.
For More Information
Our Taxes and Your Pension page has additional information about withholding, including 1099-R tax form information, how to submit a paper W-4P form, what to do if you receive more than one benefit payment from NYSLRS and more.
If you need help completing the W-4P form, you can find phone numbers and online resources on the IRS Let Us Help You page.
Please note: Effective January 1, 2023, NYSLRS does not withhold federal income tax from benefits that are not subject to tax reporting.