March Issue
March 10, 2015

ERS: Taxes and Your ERS Pension

Author: State Comptroller Thomas P. DiNapoli
Source: NYSUT United

New York State Comptroller Thomas P. DiNapoliDid you know that your pension benefit is not subject to New York state or local taxes? It is, however, subject to federal income tax. Shortly after you file your Retirement Application (form RS6037), we'll mail you a W-4P form (Withholding Certificate for Pension or Annuity Payments). When submitting this form, you can instruct us to:

  • Use the federal withholding table to determine the amount to be deducted from your pension based on the number of exemptions you claim; and/o
  • withhold a fixed amount each month; or
  • not withhold any amount for federal income tax.

If you choose to have a specific dollar amount withheld, especially if you have multiple sources of taxable income, you may want to consult with a tax professional. He or she can assist you in determining the amount that needs to be withheld from your monthly benefit to meet your federal tax obligation.

To have your taxes withheld based on your marital status and number of exemptions, you can use our online Federal Tax Withholding Calculator at www.osc.state.ny.us/retire/retirees/tax_services_information.php. By answering four simple questions, you can determine how much withholding, if any, would be deducted from your retirement benefit based on the federal withholding tables.

If you don't submit your W-4P form, we will withhold using the status of "married with three dependents." Of course, if you need to change your withholding status or deductions at any time, simply submit a new W-4P form, available on our website or from our call center.

For federal income tax filing purposes, we'll mail you form 1099-R (Distributions From Pensions, Retirement or Profit-Sharing Plans, IRAs, Insurance, Contracts, Etc.) by Jan. 31 of each year. It's important to keep us informed of your current address.

This will ensure you receive your 1099-R form as well as other important retirement-related information.

Contact our call center to update your address. However, if your new address includes a PO Box or is located outside of the United States, your request must be in writing (by letter, or fax at 518-402-4433).

Though New York state does not tax your retirement benefit, if you move to another state, that state may. A good resource to consult is the Retired Public Employees' Association. Visit their website at www.rpea.org for a list of what income is taxed in each state. For other tax-related questions, visit our website at www.osc.state.ny.us where you'll find a tax section addressing those questions. You can also contact our Call Center toll-free at 866-805-0990 or 518-474-7736 in the Albany, N.Y. area.

Every month state Comptroller Thomas P. DiNapoli, sole trustee of the New York State and Local Employees' Retirement System, provides information on the system, which delivers retirement benefits to many NYSUT School-Related Professionals and other support staff. If you are an ERS member with a question of general interest, email united@nysutmail.org.

For immediate assistance, contact the ERS Call Center toll-free at 866-805- 0990, or 518-474-7736 in the Capital District area.

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