Monthly pension payments received from SDCERA, except for all or a portion of service-connected disability retirement payments, are subject to federal income tax withholding. If you are a U.S. citizen or a resident alien, you may choose not to have tax withheld, but you must provide SDCERA with your home street address (not a P.O. Box) located within the United States. Otherwise, SDCERA is required to withhold tax. If you do not make a tax election, your withholding will be calculated as if you are single with no adjustments.
IF YOU DO NOT WANT TO MAKE A TAX ELECTION OR CHANGE A PRIOR ELECTION, NO ACTION IS NECESSARY.
If you do not pay your taxes through withholding or do not pay enough tax this way, you may have to pay estimated tax. You may incur penalties under the estimated tax rules if your withholding or estimated tax payments do not meet Internal Revenue Service (IRS) requirements. Withholding only applies to the taxable portion of your benefit payment.
Federal tax election forms with instructions, worksheets and tax withholding tables can be found at https://www.irs.gov/pub/irs-pdf/fw4p.pdf. If you are a resident of the State of California, you can find state withholding forms at https://edd.ca.gov/siteassets/files/pdf_pub_ctr/de4p.pdf. You can submit your tax withholding forms by email to firstname.lastname@example.org or by mail to:
2275 Rio Bonito Way, Suite 100
San Diego, CA 92108
Withholding decisions can be complicated. The IRS provides a Withholding Calculator for taxpayers to estimate their withholding for federal income taxes. The Withholding Calculator can be found at https://apps.irs.gov/app/tax-withholding-estimator. If you have any questions regarding your tax withholding, you should contact a tax professional.