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Important Notice Regarding Income Tax Withholding Table Changes

On Feb 21, the Internal Revenue Service released new withholding tables that resulted in more take-home pay this spring for millions of American workers and retirees. The new tables incorporate the new Making Work Pay credit, one of the key tax provisions included in the American Recovery and Reinvestment Act of 2009 that became law earlier. Eligible workers and retirees have seen this change in take home pay without any action on their part since March 2009. However, APRS has been informed by the IRS that the Making Work Pay credit is not available for pensions and annuities such as the benefits you get from the Austin Police Retirement System. Nevertheless, the IRS ordered that retirees' withholding amounts must be changed, even if they don't qualify for the credit. If you, or your tax advisor, believe that the increased take home benefit payments will result in under withholding and make you owe more taxes at year-end 2009, please submit a revised Form W-4P to ensure that enough tax is withheld to cover the tax you may owe. Enclosed is the IRS notice 1036-P which explains the optional procedure for retirees who wish to offset the Making Work Pay credit. A blank Form W-4P can be found at www.ausprs.org/forms and must be received by the Pension Office staff prior to the 15th of the month in which you would like the change made. Any forms received after the 15th will be processed for the following month. APRS staff cannot provide tax advice. Additional information about the change in withholding tables is available at www.irs.gov or by calling 1-800-829-1040. Local walk-in assistance is available at the IRS, 825 E. Rundberg Lane, Austin, TX 78753 Mon-Fri 8:30am-4:30pm. Publication 919, from the Internal Revenue Service (www.irs.gov), provides additional guidance on income tax withholding.

IRS Website

IRS Notice 1036-P

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