IMPORTANT!
January 10, 2011 | 4:30 PM
GM personnel contacted us today requesting we relay the following information to all of our members.
Jack: I just responded to a
retiree question regarding changes in Federal and State Tax laws
that impact withholding for 2011. As you communicate with a
large number of retirees, I thought that I would pass this on to
you also.....
As of January 1, 2011 the
optional Making Work Pay Credit withholding adjustment
will no longer be a part of the Federal withholding tables. The
impact to many retirees receiving qualified recurring (pension)
benefits will be that their Federal withholding will be reduced
by a maximum of $33.40 (i.e. their net pension benefit will be
higher) if their withholding marital status is single. Their
withholding will be reduced by a maximum of $50.00 if their
marital status is married.
In addition to the Making
Work Pay Credit change, there are also Federal tax changes
that will impact withholding. The expectation is that these
changes will show up in the February 1st or March 1st pension
payments. Some states withholding amounts are linked to Federal
withholding. Since Federal withholding will be changing for
some retirees, their state withholding may also change slightly.
Based on a preliminary analysis
of the 2011 Federal tax tables, some retirees who never had
withholding will see it for the first time because the starting
point for withholding is lower in 2011 than it was in 2010.
Other retirees may see slight increases or decreases. This
is similar to what happens every year.
Additionally, beginning January
1st four states have made changes to their state withholding
requirements for pension benefits: Michigan, California,
Kentucky and Minnesota. As an example, in Michigan, the
exemption amount is changing from $3,600 to $3,700.
Finally, as a reminder,
retirees are responsible for withholding enough money from their
pension payments to meet their tax obligations. If retirees
have questions or concerns regarding their withholding, they may
call the GM Benefits and Services Center at
1-800-489-4646 to ask any questions
or to request a change to meet their individual tax needs.
Happy New Year to you all.
Preston
Preston M. C.
Director, Pension and Savings Plans
General Motors LLC
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