2021 Retiree Underwithheld Federal Income Tax Frequently Asked Questions (FAQ)
If you are a TRS retiree with federal income tax withholding for January and February that was lower than the appropriate amount for your monthly benefit, please refer to the frequently asked questions below to find answers about the issue and resources available to you. If you need to discuss the matter with a representative, please feel free to use our Contact Us link on our website to have a staff member reach out to you by clicking here, or give us a call between 8:00 A.M. and 5:00 P.M at (404) 352-6500.
Q. Which months were affected by the incorrect amount of tax being underwithheld?
A. January 2021 and February 2021.
Q. Were all retirees affected?
A. No, all retirees were not affected. If this applies to your benefit, then you would have received communication by mail or email if you have a registered online TRS account. If you are unsure if you were affected or not, please contact us.
Q. When will the correct amount be applied to my monthly benefit?
A. The appropriate federal income tax amounts will be withheld beginning March 2021.
Q. Will this change reflect an increase in my federal taxes withheld?
A. Everyone’s benefit amount is different, but some will see an increase in the amount of tax withheld.
Q. How will I know how much difference there will be in my monthly benefit beginning March 2021?
A. Once your March payment is sent, you will be able to review the amount of federal income tax withheld by logging into your TRS account by clicking here and then clicking View My Payment History.
Q. Will the new amount reflect an adjustment for the underwitheld amounts for January and February?
A. No, the increase in federal income tax withholdings beginning in March will not include adjustments for taxes underwithheld in January and February.
Q. Will this have an impact on my 2020 federal tax return?
A. No, this will not have an impact on your 2020 tax return.
Q. Do I need to make any adjustments to my tax withholdings to adjust for January and February’s shortage?
A. No, you do not have to make any changes; however, if you would like to adjust your tax withholdings you can log into your TRS account here and click Update My Tax Withholdings or return a completed W-4P form, which you can download from our website. You can also mail or fax that form back to us.
Q. How do I determine my tax liability?
A. You should contact your tax professional or CPA to determine your tax liability. The IRS also has a tax calculator you can use to determine your estimated tax liability for 2021. This calculator can be found at www.irs.gov/individuals/tax-withholding-estimator.
Q. Can I elect a flat rate on the W-4P?
A. There is not an option to elect a flat rate; however, an additional amount can be indicated on line 3.
Q. How soon will my changes take affect once I submit an updated W4-P to TRS?
A. If a W4-P is completed prior to the 14th of the month, the changes will take effect the following month. If the form is received on the 15th or later, the change will take effect on the 2nd benefit payment after the submission. The quickest way to make changes to your federal tax withholdings is through your TRS account online.
Q. Will the underwithheld amount affect my tax liability for the 2021 tax year?
A. We are not able to give advice about tax matters, so we would recommend that you speak to a CPA or with your tax advisor about the issue. Below you will find some resources that may be of assistance to you to help you determine if the underwithheld amounts will affect your 2021 tax return.
Additional Resources Available to You
IRS Tax Help Locator Tool
The state of Georgia and the IRS have set up Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) locations that offer free tax help, particularly for those who are 60 years of age and older, specializing in questions about pensions and retirement-related issues unique to seniors. These locations operate during the tax filing seasons which typically are between January and April.
The TCE program offers free tax help, particularly for those who are 60 years of age and older, specializing in questions about pensions and retirement-related issues unique to seniors. You can locate a facility at https://irs.treasury.gov/freetaxprep/.
To find more information about these services, please visit www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers.
AARP Tax-Aide Site Locator
AARP Foundation Tax-Aide provides virtual and in-person tax assistance free of charge with a special focus on taxpayers who are over the age of 50 or have low-to-moderate income. Tax-Aide volunteers are located nationwide and are trained and IRS-certified every year to make sure they know and understand the latest changes and additions to the tax code.
Use the search function here to find out the status of a site near you. Requesting tax help does not guarantee service. Tax assistance is provided in safe environments using a variety of methods (in-person, virtually, or both) based on a number of factors, including where you are located, COVID-19 spread, and volunteer availability. If you would like more information about the Tax-Aide program, visit www.aarpfoundation.org/taxaide.
IRS Tax Payer Advocate Service
The IRS has an independent organization that helps taxpayers with issues they cannot resolve on their own. More information can be found at www.taxpayeradvocate.irs.gov/.
Tax Preparation Services for Military Service Members and Their Families
If you currently or pervious served in the military and have questions unique tax situations specific to you or your family, MilTax consultants are specially trained to help. Find out more about their services at www.militaryonesource.mil/financial-legal/tax-resource-center/miltax-military-tax-services/.