survivors and beneficiaries

Taxes - Survivor Benefit

The ERS cannot provide tax advice. Survivors should consult a tax advisor about federal and state tax elections.

This section applies to survivors receiving a monthly survivor benefit. Please see the Section, Taxes - Lump Sum, if entitled to a lump sum death benefit.

Federal Tax

Federal law requires that federal income tax be withheld from the benefit unless survivors 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 from the monthly survivor benefit.  The amount withheld will be based on the tax table for a married person with three exemptions (the amount required by law). 

State Tax

The survivor benefit may be subject to State Income Tax. 

Survivors residing in Maryland can carefully read and complete the Maryland Income Tax Withholding Form, Maryland Income Tax Withholding for Annuity, Sick Pay and Retirement Distributions Form 507P

If a survivor resides in or moves to a different state, the benefit may be subject to that state's taxes. Survivors 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.

Survivors 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 survivor or an authorized representative. Authorized Representatives should call the ERS Office for direction on submitting proper documentation, which must be approved by the ERS.