Note: The W-4P form has changed. See recently updated Federal Tax Withholding Information below.
Is My Pension Taxable?
Most NYSLRS pensions are subject to federal income tax (some disability benefits are not taxable). NYSLRS pensions are not subject to New York State or local income tax, but if you move to another state, that state may tax your pension. Visit the Retired Public Employees Association website to see which states tax pensions.
Federal Tax Withholding Information
NYSLRS calculates the amount withheld from your monthly benefit payment based on the information you provide us on the W-4P form (Withholding Certificate for Pension or Annuity Payments).
You can check your current withholding by signing in to Retirement Online and viewing your most recent benefit payment pay stub. If you retire and do not submit your withholding information, we will apply the IRS default withholding status of single with no adjustments.
New W-4P Form
The IRS released a new version of their W-4P federal income tax withholding form. In 2023, NYSLRS was required to update our tax withholding form as well. You do not need to submit the new W-4P unless you want to change the amount of your tax withholding.
The new form no longer allows tax filers to adjust their withholding by electing a specific number of withholding allowances. Instead, the W-4P form has new fields for increasing or decreasing the amount of withholding, including fields for tax credits and deductions.
How to Change Your Federal Withholding
Retirement Online makes it fast and convenient to change your withholding information with an online form that collects the same information as the new paper W-4P form. To change your federal tax withholding, sign in to Retirement Online. Then, from your Account Homepage, click the green “Update My W-4P Tax Information” button and follow the steps to update your withholding. If you update your withholding online by the middle of the month, your changes will generally be applied that month. We will notify you by mail or email (depending on your contact delivery preference) when the update has been made.
Please note: Effective January 1, 2023, NYSLRS does not withhold federal income tax from benefits that are not subject to tax reporting.
You can also download, print and complete a paper W-4P form to update your withholding information, however paper forms take longer to process. Be sure to use this NYSLRS W-4P form (revised 12/22) and make sure you sign and date it:
Form W-4P Withholding Certificate for Pension or Annuity Payments
NYSLRS will no longer accept previous versions of the W-4P form.
Completing the Form
Basic Withholding
Step 1. Select your filing status. If you want your federal withholding to be based only on the benefit amount you receive from NYSLRS, with no adjustments, you can skip steps 2 – 4.
Adjustments to Withholding (Dependents, Tax Credits)
Complete Steps 2 – 4 ONLY if they apply to you.
Step 2. If you have income from a job or more than one pension/annuity, in addition to your NYSLRS pension, or if you’re married filing jointly and your spouse receives income from a job or pension/annuity, you can enter that in Step 2.
Click “View Instructions” or see page 2 of the paper W-4P form for examples that may help you with this step.
Step 3. If you need to claim dependents, you can enter that information in Step 3.
Step 4. If you have other adjustments to make — other income, deductions or extra withholding — you can complete Step 4.
Click “View Instructions” or see page 3 of the paper W-4P form for instructions and a worksheet that may help you with this step.
If you are a U.S. citizen or resident alien living in the United States, you can elect not to have taxes withheld from your benefit. Caution: If you have too little tax withheld, you will generally owe tax when you file your tax return, and you may owe a penalty unless you make timely payments of estimated tax. Generally, if you are a U.S. citizen or a resident alien, you are not permitted to elect not to have federal income tax withheld on payments to be delivered outside the United States.
The NYSLRS form was created based on the IRS version of the form, so if you need further assistance completing the NYSLRS form, you can visit the Internal Revenue Service (IRS) website and read the current revision of the IRS Form W-4P. Detailed instructions start on page 2. You can also find phone numbers and online resources on the IRS Let Us Help You page.
If You Receive More Than One Benefit Payment from NYSLRS
NYSLRS administers two retirement systems — the Employees' Retirement System (ERS) and the Police and Fire Retirement System (PFRS). It is possible to receive more than one benefit from one or both systems — as a retiree, a beneficiary or an ex-spouse who is receiving a benefit under a domestic relations order.
Generally, your withholding is tied to the retirement system. So, if your benefits are from the same system, you only need to submit your withholding information once and your preferences will be applied to all benefit payments you receive from that system. However, if you receive a benefit from both ERS and PFRS, you’ll need to submit a W-4P form for each system.
Your benefit payment pay stub will list whether the payment is from ERS or PFRS.
1099-R Information
By January 31 of each year, we mail you a 1099-R form if you received taxable income from NYSLRS in the previous calendar year, or if you had federal tax withheld from your benefit payments. For help understanding your 1099-R, visit our interactive 1099-R tutorial.
You can request a reprint of your 1099-R form beginning the second week in February. Request your copy:
- By sending us an automated request;
- Calling toll-free, 866-805-0990; or
- Using our secure contact form.
If you made after-tax contributions to NYSLRS while you were working, a small portion of your benefit may be exempt from federal tax. The non-taxable amount is shown in Box 5 on your 1099-R. You should report only the taxable amount (in Box 2a) on your tax return. After you have fully recovered your after-tax contributions, the amount in Box 5 will be zero.
Rev. 6/23