IRS Issues New Tables To Make Up For Under Withholding on Pension Payments

The IRS has issued Notice 1036-P, which provides tables for calculating additional amounts to be withheld from pension payments. The use of these tables is optional. The tables are intended to produce amounts which offset the reduction in income tax withholding under the tables issued in February 2009 in Publication 15-T (which incorporated the Making Work Pay Credit).

Notice 1036-P notes that, if a pension payee submitted a Form W-4P, after the issuance of the revised income tax withholding tables in Publication 15-T, to request additional withholding on line 3, the pension payor using an optional table under Notice 1036-P may wish to contact that payee to determine if that additional withholding is still desired, or if the payee wants to submit a new Form W-4P.