Tax News

CCH (cch.taxgroup.com) reports:

  The IRS has announced new withholding adjustment procedures for pension plans. The new procedures for pensions will make withholding more accurate for pension recipients. This change will help some pensioners avoid a smaller refund next spring or even a balance due in limited situations.

  The new procedures are not mandatory and pension payors may continue to use the February 2009 withholding tables. For those plans that adopt the new procedures, withholding on pension payments will be automatically adjusted. The IRS is also encouraging pension payors who choose to implement the new withholding adjustment procedures to contact retirees who previously submitted a Form W-4P, Withholding Certificate for Pension or Annuity Payments, requesting additional withholding after the February withholding tables were issued.

  The newly announced procedures apply only to pension payments but the IRS is gearing up for a wider outreach campaign to educate pensioners and other taxpayers about the withholding tables and other matters.

IR-2009-50,
2009FED ¶46,368

Notice 1036-P (May 2009), Additional Withholding for Pensions for 2009

Other References:

 
Code Sec. 3405

  CCH Reference - 2009FED ¶33,622.04

  Tax Research Consultant

  CCH Reference - TRC RETIRE: 42,700