IRS urges retirees to check pension withholding in light of tax reform

Tax Hot Topics newsletter In IR-2018-180, the IRS encouraged retirees to check their pension payments for proper tax withholding after the changes implemented by the Tax Cuts and Jobs Act. Retirees can utilize the IRS Withholding Calculator on the website to avoid paying too much or too little tax on their pension payments. Pension recipients can make withholding changes as needed by filling out Form W-4P and giving it to their payer.

In addition, retirees can request the Social Security Administration to withhold tax on their Social Security benefits to help pay their income tax liabilities. Withholding on Social Security benefits is voluntary, and beneficiaries can choose to have income tax withheld at the following rates: 7%, 10%, 12% or 22%. To request voluntary withholding, retirees can fill out Form W-4V from the IRS website.

Jeff Martin
Partner, Washington National Tax Office
T +1 202 521 1526

Keith Mong
Managing Director, Washington National Tax Office
T +1 202 521 1554

James Sanchez

Senior Associate, Washington National Tax Office
T +1 202 861 4107

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