If you do not elect a tax withholding preference, the law
requires that tax withholding be withheld from payments based
on the tax table rate for a married person claiming three
exemptions.
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Once you elect a tax withholding preference, that preference
will remain in effect until you change it. You may elect no
withholding; withholding based on the tax table, or on the
tax tables plus an additional monthly amount; or a specified
dollar amount. CalSTRS automatically adjusts the withholding
each year to reflect any changes to the tax table or changes
in your monthly taxable payment. You may change your tax preference
at any time. Download and follow the instructions to submit
the Income
Tax Withholding Preference Certificate form.
If you are a registered myCalSTRS
user, you can view your current tax withholding elections.
Login to myCalSTRS
and go to the "Account Profiles" page, then click
the "Tax Info" button under the "CalSTRS"
profile tab.
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If you change your mailing address to another state, but
you are still a resident of California, CalSTRS will discontinue
withholding state tax. If you want to continue California
state tax withholding, you must submit a new tax withholding
request. Download and follow the instructions to submit the
Income Tax
Withholding Preference Certificate form.
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If you receive more than one benefit type, you may elect
a different tax preference or the same tax preference for
each benefit type. You must write the benefit type on the
tax form to which you want the tax preference applied. Download
and follow the instructions to submit the Income
Tax Withholding Preference Certificate form.
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You cannot enter a percentage in addition to the tax table;
you can only enter a flat dollar amount.
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When you submit a tax withholding request, the new request
replaces the existing tax preference. The new request amount
is not in addition to the current tax withholding preference.
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If you elect to have tax withholding based on the tax table,
you may not have taxes withheld. This will occur in cases
where the monthly taxable allowance is below the minimum amount
required for withholding based upon the tax table you have
elected.
In some cases, your monthly benefit may not have tax withholding
if the monthly benefit is below the minimum required for the
tax table you elected; however, you may have withholding from
the quarterly supplemental. You may also have monthly tax
withholding, but not supplemental withholding if your supplemental
falls below the minimum required for the tax table you elected.
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If you are receiving a payment that is rollover eligible,
federal taxes will be withheld at a mandatory 20 percent.
For state withholding, you may choose either no withholding
or a flat 6 percent. These choices apply to certain annuity
options from the Defined Benefit Supplemental (DBS) plan as
well. Your account on my
CalSTRS
may show the tax preference at a default rate of married with
three exemptions, but the taxes will be withheld in accordance
with federal and state taxation regulations.
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Quarterly payments are made to some retired members and beneficiaries
to maintain 80 percent of the purchasing power of their initial
retirement benefit. All supplemental payments made after January
1, 2003, are taxed on the same tax preference as the monthly
benefit if taxes are held from the tax tables. There are two
exceptions to this rule:
- If you are having taxes withheld from your monthly payment
at a flat rate, no taxes will be withheld from your supplemental
payment.
- If you are using the tax tables and have an additional
flat amount withheld, only the tax table amounts will apply
to the supplemental. No additional amounts will be withheld.
If you elect to have no withholding from your monthly allowance,
no withholding will be made from the supplemental. Below are
examples of withholding scenarios:
|
|
| Monthly Payment** |
2,816.59 |
81.13 |
321.20 |
| Quarterly Supplemental Payment |
248.31 |
0 |
0 |
| OR |
| Monthly Payment |
479.01 |
0 |
0 |
| Quarterly Supplemental Payment |
1,874.24 |
29.38 |
179.90 |
 **
| Monthly Payment** |
2,816.59 |
25.00 |
150.00 |
| Quarterly
Supplemental Payment |
1,874.24 |
0 |
0 |
**
| Monthly Payment** |
2,816.59 |
32.51 |
244.10 |
| Quarterly
Supplemental Payment |
1,325.67 |
8.14 |
14.20 |
 **
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Lump-Sum distributions, including a refund of your contributions,
are subject to special tax provisions. For more information
on these rules, please see the
Tax Considerations for Rollovers document.
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For more information on Tax Information and Legal Issues,
please see
Section 9, Tax Information and Legal Issues in the CalSTRS
Member Handbook.
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