Montgomery County, PA

 

Members:
Commissioner James R. Matthews, Chairman
Commissioner Joseph M. Hoeffel, Vice Chairman
Commissioner Bruce L. Castor, Jr.
Controller Diane B. Morgan, Secretary
Treasurer Garrett D. Page

 

 

In February 2009, the United States Government passed the “American Recovery and Reinvestment Act” which included the “Making Work Pay” tax credit on earned income.  The Montgomery County Employees' Retirement Board was required to and did adopt the revised Internal Revenue Service (IRS) tax tables issued in conjunction with that legislation. 

 

As a result, the tax credit was applied to the amount of Federal Withholding Tax (FWT) withheld from monthly pension benefits.  Therefore, application of these revised income tax tables lowered the FWT from retirement checks.  Notice of these reductions was included on the March 2009 pension checks or direct deposit statements.

 

Because pensions are not considered earned income, retirees should review the new withholding rules with their tax advisors and submit a new Form W-4P if changes are desired.  Otherwise, they may receive a smaller refund than anticipated or be required to pay back the tax credit received when they file their 2009 tax return due April 15, 2010.  Tax forms can be found by visiting the IRS web site by clicking here. 

 

                                                                                Sincerely,
                                                                                Diane B. Morgan
                                                                                Controller

 

IMPORTANT REMINDER:  Effective April 30, 2009, the Montgomery County Employees' Retirement System will no longer mail monthly notices of direct deposit.  Instead, in January of each year retirees will receive a statement, which will include any applicable cost-of-living increases for the year.  They are advised to please keep April’s statement for their records.