Important Note: Federal Tax Withholding Rates for February 1 CalSTRS Benefit Recipient Payments
Late changes to the Internal Revenue Service federal tax withholding rates effective January 1, 2013 have resulted in CalSTRS withholding additional federal taxes from benefit payments dated February 1, 2013. CalSTRS is aware of the issue, and we are promptly rectifying the situation by implementing a swift solution for our benefit recipients, including reimbursement of the over-withheld amounts as detailed below.
CalSTRS will issue a separate reimbursement for each of your accounts that had $10 or more over-withheld. Reimbursements will be issued in mid-February via your regular method of payment.
If the amount of over-withheld taxes was less than $10, CalSTRS will not issue reimbursements due to the cost incurred in processing these payments. The less-than-$10 over-withholding will be on record with the IRS, and the 1099-R that you’ll receive in early 2014 will reflect the over-withholding payment amount for use when filing your taxes.
Your March 1, 2013 benefit payment will reflect the correct federal tax withholding rates. If you’ve made recent changes to the amount of your federal tax withholding, we recommend that you use the March 1, 2013 warrant as a baseline to determine if those changes are necessary, as opposed to basing your changes on your February 1, 2013 payment.