Tax Time! New Retiree Needs Help, Please!

**Lobo** · 01-09-2009, 05:41 PM

I was 60 years old last June '08 and retired as of July 1st, 2008. I'm under FERS. I recieve the FERS retirement check which also includes the Social Security (SS) supplement amount. I also withdraw a monthly payment from my TSP account. I live in MS, which does not tax Federal Retirement payments.

Questions:

1) I think I must pay federal income tax on all the income mentioned above? Is this correct?. The only part I wonder about is the SS Supplement portion of the check. Is this SS portion also under federal income tax requirements??

2) Does anyone happen to know if the SS supplement is NOT considered a portion of the fedreal retirement income and therefore IS taxable by the state of MS? (I know it's a long shot in asking for an answer to that one) Also, would the TSP NOT be considered a part of the federal retirement income and therefore taxable by MS as such? One would think that if the FERS, SS and TSP are the 3 legs of the current federal retirement system that each leg would be considered a part of the retirement payment. Is that wishful thinking...or what?!?!? Ha!

Any help appreciated.

Lobo

**budnipper1** · 01-09-2009, 07:35 PM

Originally Posted by Lobo

I was 60 years old last June '08 and retired as of July 1st, 2008. I'm under FERS. I recieve the FERS retirement check which also includes the Social Security (SS) supplement amount. I also withdraw a monthly payment from my TSP account. I live in MS, which does not tax Federal Retirement payments.
Questions:
1) I think I must pay federal income tax on all the income mentioned above? Is this correct?. The only part I wonder about is the SS Supplement portion of the check. Is this SS portion also under federal income tax requirements??

2) Does anyone happen to know if the SS supplement is NOT considered a portion of the fedreal retirement income and therefore IS taxable by the state of MS? (I know it's a long shot in asking for an answer to that one) Also, would the TSP NOT be considered a part of the federal retirement income and therefore taxable by MS as such? One would think that if the FERS, SS and TSP are the 3 legs of the current federal retirement system that each leg would be considered a part of the retirement payment. Is that wishful thinking...or what?!?!? Ha!
Any help appreciated.
Lobo

You and I are in the same situation. I retired last January and was 60 then, so this will be my first tax filing year since retirement. My interpretation is this: The supplemental portion of our retirement is calculated to equal a "fractional amount" of what the actual social security benefit would be if we were old enough to be eligible now. (minimum age is 62 for SS) But, that supplemental portion of the annuity check is actually paid by OPM (not the SSA). My understanding is that all my retirement income, including the supplemental, is taxable income to the IRS. Of course, you should call your tax guy to be sure. I'll be calling mine before April 15th.

For that matter, actual Social Security benefits paid directly from the SSA have to be reported as taxable income as well, depending on your age and tax bracket.
http://www.irs.gov/newsroom/article/...179091,00.html

FERS supplemental.jpg