At retirement, you completed forms instructing SCERA how to withhold taxes from your monthly benefit payment. As a benefit recipient, you have several options regarding your withholding for Federal and State of California taxes.
- You may select an amount based on the tax tables and your tax filing status (i.e., single or married, and the number of exemptions you designate).
- You may designate a specific amount (State of California only).
- You may use the tax tables and designate an additional amount be withheld.
- You may even elect to have nothing withheld.
If you live outside of California, SCERA is not able to withhold any state taxes for you.
You may change your tax withholding at any time by logging into your MySCERA* account. You may also complete and submit the appropriate tax form: State Tax form, Federal Tax form. SCERA must receive your new form by the 15th of the month for a change to be effective the month-end payment following receipt. If your form is received later than the 15th of the month, the change will be effective for the following month-end payment.
* Federal Tax Withholding changes in MySCERA will not be available while the system is programmed for the new IRS form changes effective 1/1/23.
If you are receiving a service connected disability retirement, some or all of your benefit may be non-taxable. Tax withholdings will only apply to the taxable portion of your benefit.
By January 31st of each year, SCERA mails 1099-Rs to benefit recipients who had taxable income in the PRIOR tax year. If you have not received yours by the second week of February, please contact SCERA to obtain a duplicate. (NOTE: Duplicate 1099-Rs are also available through your MySCERA account.)
Retirement contributions prior to 1987 (or earlier, depending on your MOU) were made on an after-tax basis. Also, you may have purchased additional service credit at any time during your membership using after-tax funds. If either of these situations applies to you, the Internal Revenue Service allows you to recover this dollar amount on a non-taxable basis. Based on IRS tables, this amount is spread over your anticipated lifetime. This amount is known as "Safe Harbor" and is designated on your Advice of Deposit or 1099R as such. Once you have recovered the Safe Harbor amount in full, your entire benefit will be taxable.