An interesting provision of the 2011 National Defense Authorization Act means that retiree paydays will be changing, and that change will include two dates in 2011. In the past, retirees received their military pay on the first day of the month, or the following business day. The 2011 NDAA mandates a change that will mean that retiree pay will be processed on the first day of the month, or the preceeding business day. As a result, the payment that was previously scheduled for 3 October 2011 will be issued on 30 September 2011, and the payment previously scheduled for 3 January 2012 will be issued on 30 December 2011.
This means that military retirees will receive 13 payments in the 2011 calendar year. This could affect the tax liability of some reciepients. Customers should check with a tax professional, the IRS, or their state tax department to see if they need to adjust their withholding.
From the press release,
This change affects regular retired pay, Concurrent Retirement and Disability Pay and Combat Related Special Compensation. The new rule also applies to retiree allotments, garnishments and court-ordered former spouse and child support payments. It does not affect annuity payments.
If retirees need to make changes to their federal or state tax withholding, the quickest and most secure way to do so is throughAvailable 24 hours a day, seven days a week, enables eligible users around the world to make routine changes to their pay information, including tax withholding, that become effective within days.
Customers who cannot access their accounts online can change federal withholding amounts by completing a new IRS Form W-4 or W-4P, or change state withholding amounts using a DD 2866. These forms can be found on the DFAS website (www.dfas.mil/retiredmilitary/forms.html) and should be mailed or faxed to the below address once completed:
Defense Finance and Accounting Service, U.S. Military Retired Pay, P.O. Box 7130, London, KY 40742-7130
It may take up to 30 days for changes to be made when mailing in a paper form.