I just joined this forum; this is my first post and I'm not sure if I am in the proper area but here goes.  I am a retired postal employee and just received a notice that my federal income  tax withholding is being increased on my Feb 1 check.  I was under the impression that Congress voted to extend the current tax rates for everyone (and I am NOT a millionaire).  It this part of the IRS mess where the rates were already changed in anticipation of the vote not going through?  I will call OPM on Monday to see if they can shed some light on this but wondered if anyone out there has noticed their fed income tax increasing lately???  Thanks, love the forum.

Not on our SS checks, no change.      YET

In case anyone is  interested I just got the answer to my question today: (quoting NARFE)

While all of the attention recently was on Congress extending the Bush era tax cuts – which happened – a lesser known federal tax credit for employees and retirees that was part of the 2009 Stimulus law was allowed to expire.

The "Making Work Pay" credit expired December 31, 2010, which could mean higher federal tax withholding amounts in monthly annuities/pensions for public and private sector retirees, including federal annuitants.  The Internal Revenue Service (IRS) issued a notice in December saying withholding tables for 2011 would no longer be adjusted for the Making Work Pay tax credit and there is no longer an optional additional withholding adjustment for pensions.

Quote from: DJH on February 01, 2011, 05:42:21 PM
In case anyone is  interested I just got the answer to my question today: (quoting NARFE)

While all of the attention recently was on Congress extending the Bush era tax cuts – which happened – a lesser known federal tax credit for employees and retirees that was part of the 2009 Stimulus law was allowed to expire.

The "Making Work Pay" credit expired December 31, 2010, which could mean higher federal tax withholding amounts in monthly annuities/pensions for public and private sector retirees, including federal annuitants.  The Internal Revenue Service (IRS) issued a notice in December saying withholding tables for 2011 would no longer be adjusted for the Making Work Pay tax credit and there is no longer an optional additional withholding adjustment for pensions.

Interesting... thanks for the update DJH...

Quote from: DJH on February 01, 2011, 05:42:21 PM
monthly annuities/pensions for public and private sector retirees, including federal annuitants.  The Internal Revenue Service (IRS) issued a notice in December saying withholding tables for 2011 would no longer be adjusted for the Making Work Pay tax credit and there is no longer an optional additional withholding adjustment for pensions.

Speaking of pensions and such, in December, Drudge had a link where by some Democrats were discussing the possibility of targeting private pensions.

They want to get their sticky little fingers on private pensions down the road. Can you believe?

What's not to believe?  Liberals (not all dems) will not be happy until they have re-distributed all the money from the wealthy to the lazy.  It's called social justice.  Listen for this term.  I have heard it used alot recently.

Quote from: DJH on February 01, 2011, 05:42:21 PM
In case anyone is  interested I just got the answer to my question today: (quoting NARFE)

While all of the attention recently was on Congress extending the Bush era tax cuts – which happened – a lesser known federal tax credit for employees and retirees that was part of the 2009 Stimulus law was allowed to expire.

The "Making Work Pay" credit expired December 31, 2010, which could mean higher federal tax withholding amounts in monthly annuities/pensions for public and private sector retirees, including federal annuitants.  The Internal Revenue Service (IRS) issued a notice in December saying withholding tables for 2011 would no longer be adjusted for the Making Work Pay tax credit and there is no longer an optional additional withholding adjustment for pensions.

   There was no increase in my pension and annuity...I have all the statements already and the projection for next year...that mi ght make someone unhappy... but it doesnt hurt my feelings :)

I had no increase in my annuity either;  I had an increase in the fed tax withheld.  A big crock.

Quote from: DJH on February 01, 2011, 05:42:21 PM
In case anyone is  interested I just got the answer to my question today: (quoting NARFE)

While all of the attention recently was on Congress extending the Bush era tax cuts – which happened – a lesser known federal tax credit for employees and retirees that was part of the 2009 Stimulus law was allowed to expire.

The "Making Work Pay" credit expired December 31, 2010, which could mean higher federal tax withholding amounts in monthly annuities/pensions for public and private sector retirees, including federal annuitants.  The Internal Revenue Service (IRS) issued a notice in December saying withholding tables for 2011 would no longer be adjusted for the Making Work Pay tax credit and there is no longer an optional additional withholding adjustment for pensions.

Here's an article for you.  You can find some pretty good info at Fedsmith:

http://www.fedsmith.com/article/2729/why-did-your-federal-annuity-payment.html

If your sole source of income is Social Security, your benefits are not taxable as income and the Jan. 1 change did not affect you.

If you are employed or receive non-SS retirement benefits, your rate of withholding was reduced as part of the overall stimulus effort by the federal government -- the "Making Work Pay" thing. That reduction in the rate of withholding expired at the end of 2010.

My non-government pension check was reduced too. Ouch.

I guess a "fixed" income is really only fixed in one direction.  :P :P :P