Department of Employee Trust Funds
December 28, 2010

January Payments Reflect Current Tax Tables

Even though changes in federal tax withholding were decided before the end of 2010, retired members of the Wisconsin Retirement System (WRS) should be aware that their January 1, 2011 annuity payment will reflect tax withholding based on the Internal Revenue Service (IRS) tax tables in effect when payments were processed. In other words, the January 1, 2011 payment will not reflect the changes to the tax tables that occurred in December and will result in a decrease in tax withholding for some WRS retirees.

Below is a more detailed explanation about the reason for the decrease in tax withholding for some WRS retirees on their January 1, 2011 annuity payment:

There were numerous tax table changes in 2010 due to passage of the American Recovery and Reinvestment Act (ARRA). An additional withholding table was put in place in mid-2010 for retirees because the standard tables were based on the Making Work Pay provisions of the federal ARRA, which did not apply to retirees. The additional withholding tables for retirees expired in December 2010. As a result, the standard tax tables are in effect until new tables are issued by the IRS. Use of the standard tax tables will result in a decrease in withholding.

The Department of Employee Trust Funds will implement new tables as soon as possible once they are released by the IRS.

As with any tax table change, we recommend retirees consult with a tax advisor to determine the appropriate state or federal income tax withholding amounts.

To change state or federal income tax withholding amounts, complete and mail ETF a new Income Tax Withholding Election form (ET-4310). You may contact ETF to request a paper copy:

• Use our toll-free Self-Service Line, 1-877-383-1888 or (608) 266-2323.
• Or send an e-mail through the “Contact ETF” section of our Internet site.