CONCORD, NH – Beginning with your January benefit payment, some NHRS retirees and beneficiaries may see a slight increase in their net retirement benefit because of a decrease in the federal income taxes withheld from your payment. This is mostly due to IRS changes to the tax brackets and withholding tables because of inflation. These adjustments will result in less federal tax being withheld for most people on a fixed income, such as a pension.
Generally, no action is required by you. The new IRS tables are designed to withhold the proper amount based on your previous withholding election (Form W-4P). However, you may want to revise your withholding election if:
- Your filing status has changed (e.g. married or single, jointly or separately, head of household);
- You know you have not had enough withheld in the past; or
- You have significant other sources of taxable income. New IRS rules in 2023 allow you to make withholding elections that consider additional taxable income when making your withholding elections.
NHRS retirees and beneficiaries can change their federal tax withholding election by submitting a new Form W-4P. This form is available at: https://www.irs.gov/pub/irs-pdf/fw4p.pdf
For more general information on federal tax withholding from pensions, see: https://www.irs.gov/forms-pubs/about-form-w-4-p
Please be advised that, if you elect to have no federal income taxes withheld, or if you do not have sufficient federal income tax withheld from your retirement benefits, you may be responsible for payment of any federal taxes and penalties for underpayment of estimated taxes.
If you need additional assistance in estimating your tax and withholding options, you should consult with a tax advisor or the IRS.
If you have additional questions about how to file a new withholding election, please contact NHRS at info@nhrs.org or (603) 410-3500, Press 2.
Note: Some benefit recipients who are receiving health insurance through the NHRS-participating employer from which they retired may also see a change in their take-home benefit amount due to changes to medical insurance premium deductions. Premium amounts are set by the former employer, not by NHRS, and typically change annually in either January or July. Retirees may access a monthly “non-negotiable advice of deposit,” which details their gross pension, any deductions, and net deposit via My Account, our secure, online portal for members and retirees.