Taxes and Your Retirement Benefits
Your ERFC retirement benefit is generally subject to both federal and state taxes. Please note, for state withholdings, ERFC only withholds Virginia state taxes.
Retirees in the Legacy Plan
(Hire Date: Before 7/01/2001)
The portion of your ERFC benefit that comes from tax-paid contributions is not subject to federal or state taxes. Tax-paid contributions include contributions paid into ERFC before 1985. That tax-free portion is spread throughout your monthly benefit payments over your expected lifetime. At the time of your retirement, ERFC uses tables provided by the Internal Revenue Service (IRS) to determine the taxable and tax-free portions of your monthly benefit. ERFC will let you know what this calculation is shortly after you retire.
Standard Deductions
Currently, the standard deductions withheld from your ERFC benefit payments include:
- Federal income taxes
- Virginia state income taxes (if applicable)
- Medical Insurance (optional)
- Dental Insurance (optional)
How Do I Change My Tax Withholdings?
You can change your federal and Virginia state tax withholdings in ERFCDirect, which includes a feature that allows you to see how much your new tax amount will be depending on what changes you make. This way, you can know your new pension benefit payment amount before you submit a change in your withholdings.
Or you can mail the W-4P Federal Tax Withholding Form or VA-4P Virginia State Tax Withholding Form to ERFC.
There may be tax penalties if your withholdings are not sufficient.
What If I Choose Not to Have Taxes Withheld?
If you decide not to have taxes withheld, you may be responsible for paying estimated taxes, and there may be tax penalties if your estimated tax payments are not sufficient.
Who Should I Call If I Have Tax Questions?
ERFC cannot provide tax advice. If you have questions about your taxes or withholdings, please consult a professional tax advisor.
Tax Statements
Tax statements (ERFC 1099-R) for benefit payments are mailed to you by the January 31 deadline.
You can also view and print a copy of your tax statement in ERFCDirect. To access it, click "1099-R" under “Benefit Information” on the left menu.
If you don't receive your printed tax statement by February 14, please call us at 703-426-3900.
Get answers to your
1099-R questions.