Social Security retirees will be the first payers to feel the impact of the new withholding tables that begin to apply this month, with the change joining a 3.57% interim pension increase.
Social Security retirees receive their pension this Monday, having already processed the rules of the new IRS tax withholding tables, which, unlike those that have been in effect so far, work according to the same logic as for the annual tax calculation.
For many retirees, the new withholding model will result in a reduction in the monthly tax paid (in the form of an advance). Thus, a pensioner (unmarried) with a pension of 1,200 euros gross will receive a net amount of 1,050 euros after deduction of withholding tax at the rate that has been applied so far.
With the new IRS table, €130.89 in taxes will be deducted from this €1,200 gross pension, bringing the net amount to €1,069.11 (€19 more than in previous months).
However, July is also the month in which pensioners (with pensions up to 12 social support indices – IFRS) will receive a 3.57% interim allowance, which would mean that the pensioner will have a pension of 1,242,84 euros gross.
Combined with this addition to the new withholding tables, this pensioner will receive a net amount of 1,100 euros, ie 50 euros more than the amount he received in June.
This increase in monthly net income, however, will result in many people with a lower IRS return after about a year, as part of this income is the result of a reduction in monthly tax payments.
Author: Portuguese
Source: CM Jornal
I’m Tifany Hawkins, a professional journalist with years of experience in news reporting. I currently work for a prominent news website and write articles for 24NewsReporters as an author. My primary focus is on economy-related stories, though I am also experienced in several other areas of journalism.