Thanks to dawdling by last year’s lame duck Congress, millions of federal retirees and survivors took cuts ranging from about $20 to more than $50 in their most recent annuity payments.
Congress waited until too late to agree, and then vote, to extend the so-called Bush tax cuts which were due to expire this December 31, 2010. Although it did approve the extension in an 11th hour vote, it was too late for the IRS, which had to pre-program its computers based on the assumed new higher rate also in effect prior to the Bush tax cut. That is also the reason that taxpayers who itemize on their federal tax returns couldn’t file their returns last month as many often do.
So did retirees notice the dip in their January annuity checks?
Insight by Infor: This exclusive e-book highlights how the military services and defense agencies are rethinking their approach to managing their supply chains and how data is driving those decisions.
Does a bear skulk in the woods?
Here’s what folks are saying:
“I was under the impression that with the signing of the tax bill during the lame duck session of Congress there would be no federal tax increase. Do you have any idea why there was an increase in federal tax when the gross monthly amount has stayed the same from last year? I am not the only federal retiree where this has happened. Thanks for checking on this. ” Ken Painter, Frederick, MD
“I guess next year. I’ll get the least expensive insurance that I can find, and also hope the INFLATION comes back so there might be a COLA.” Sandra Hobbs, Bend, Or
And so it goes…
Lots of angry, confused retirees. For good reason.
Blame it all on Congress. Not the OPM, certainly not the IRS.
In fact the IRS commissioner warned Congress last fall that unless they enacted legislation (and quickly) designed to extend the Bush tax cuts, the IRS would have to proceed on the assumption that the old (pre-Bush cuts) rates would resume as of January 1, 2011.
Bottom line is that virtually every federal retiree or their survivors saw their health premiums go up this year, did not get (for the second year in a row) a cost of living adjustment and were hit – temporarily – with higher taxes. Other than that, no big deal!!!
So what’s next? Tax expert Bob Leins discussed the situation yesterday on his For Your Benefit radio show. He expects the next checks retirees get will be based on the 2010 tax rates and that the retirees will get a refund of whatever they lost this month. For a complete explanation of the situation, you can listen to that show anytime by clicking here.
To reach me: email@example.com
Nearly Useless Factoid
by Suzanne Kubota
“Oreo-Stuffed Chocolate Chip Cookies.” Yup. They exist. BonAppetit calls them “the turducken of cookies.” Recipes suggest using double-stuffed Oreos. Like if you’re going to stuff an Oreo into a chocolate chip cookie, you’re going to use the regular ones? Piffle.
MORE FROM FEDERAL NEWS RADIO
OPM: D.C. feds can take unscheduled telework, leave on Tuesday
Area feds have the option to work from home or take a day of annual leave.
Former fed gives retirement advice
Recently retired fed Ernest Porter joined co-hosts Bob Leins and Tammy Flanagan to discuss how federal employees should prepare before leaving federal service. Porter worked for the FBI for more than 37 years.
OPM security clearance chief retires
Other headlines in this morning’s Federal Newscast: VA created new office for tribal vets, U.S. ambassador to China resigns, Why taking lunch makes you a better employee.
TSP spends $1.5M to stop improper payments
This month, a computer glitch caused 10,000 people to incorrectly receive $58 million in improper payments from their Thrift Savings Plan accounts. The TSP Board bought a new program aimed at preventing another glitch.