Need help with your income tax withholding form?

Some important points to consider:

►CCCERA is required by law to withhold State and Federal tax at the “married with 3 exemptions” rate, if you DO NOT have a form on file declaring your choice of withholding.

►You may choose from several withholding options:

  1. No withholding from your retirement allowance,
  2. Amounts based on the Federal and State tax tables,
  3. Specific dollar amounts for Federal and State,
  4. Amounts based on the Federal and State tax tables plus a specific dollar amount.

► The top half of the form is for federal income tax withholding. The bottom half is for state income tax withholding.

►If you do not elect to withhold Federal or State income tax from your retirement benefit, or if you do not withhold enough tax, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your payments are not sufficient to cover your tax liability.

►Withholding will be based on your gross retirement allowance, even if all or a portion of your benefit is excludable under Federal or State law (such as a disability retirement allowance).

►Your election to have tax withheld (or not withheld) will remain in effect until you change it. You may change your withholding election at any time by completing a new CCCERA form.

►CCCERA retirees living outside the State of California are not required to pay California state tax. (But you may have tax liability in your residence state.)

►CCCERA cannot provide tax information specific to your situation. Please consult your accountant, tax attorney, the State Franchise Tax Board, or the Internal Revenue Service for information on your individual tax filing requirements.

 

A Note About Pension Garnishment

Pension payments can be garnished (court ordered withholding of funds to satisfy a debt) under certain circumstances. If you have not paid court ordered child or spousal support, or state and/or federal taxes, your pension payment may be "garnished" to pay the debt. Pension payments cannot be garnished for car or home liens.