The ERS cannot provide tax advice. Retirees should consult a tax advisor about federal and state tax elections.
Federal law requires that federal income tax be withheld from the retirement benefit unless you instruct the ERS to do otherwise. Read and complete the Federal Withholding Form, Withholding Certificate for Pensions or Annuities, Form W-4P.
If a Form is not completed, federal income tax will automatically be withheld in the amount required by law which is based on the tax table for a married person with three exemptions.
The retirement benefit may be subject to State Income Tax.
Retirees residing in Maryland, complete the Maryland Income Tax Withholding Form, Maryland Income Tax Withholding for Annuity, Sick Pay and Retirement Distributions Form 507P.
If a retiree resides in or moves to a different state, the retirement benefit may be subject to that state's taxes. Retirees must notify the ERS and request state tax withholdings for that state. Changing an address with the ERS is not a request to change state tax withholdings.
Retirees can change tax election(s) at any time by either:
Completing new Forms;
Writing a letter to the ERS indicating the new election(s) and the effective date of the change; or,
Completing the tax election form on the payment stub from the Northern Trust Company and mailing it directly to the ERS.
All change requests must be submitted to the ERS by the 10th day of the month preceding the month of payment. Changes received after the 10th may not be processed until the following month.
All change requests MUST be signed by the retiree or an authorized representative. Authorized representatives should call the ERS Office for direction on submitting proper documentation, which must be approved by the ERS.