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Retirement Planning

Whether you are close to federal employee retirement or just starting out in your career, this is the place to share ideas with your federal colleagues on creating a secure financial foundation.

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#1 Posted : Tuesday, February 01, 2011 8:28:12 PM(UTC)

Rank: Newbie

Groups: Registered
Joined: 4/13/2009(UTC)
Posts: 11

Does anyone know: I start getting the FERS Annuity Supplement this year. If my Adjusted Gross Income on my Tax return for next year (the 1040) is under $32,000, then there is no tax on the Supplement. If my Adjusted Gross Income is between $32K and $44K, then I pay tax on 50% of the supplement. If the AGI is over $44K, I pay tax on 85% of the Supplement.
Is this correct?
I'm trying to figure out how much Federal Withholding Tax I should have taken out of my monthly annuity check this year.
My Adjusted Gross Income will be below $32K. My Supplement will be $877 a month. So, I'm thinking I should just have federal tax taken out that doesn't even consider the $877 extra I'll be receiving this year.
Am I calculating this correctly? I got a major headache trying to find info on this.
Any help would be greatly appreciated!!!
#2 Posted : Thursday, February 03, 2011 1:40:37 AM(UTC)

Rank: Advisor

Groups: Registered
Joined: 6/14/2004(UTC)
Posts: 135

No, sorry to say that you're headed down the wrong path on this.  Although the amount that you receive for the FERS Annuity Supplement is based on your expected Social Security, it is paid by OPM and is NOT Social Security.  It is part of your pension and is taxed as ordinary income.

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