NEW CALIFORNIA TAX TABLES MAY AFFECT YOUR ALLOWANCE
In February, Governor Schwarzenegger signed a new California state budget into law. One provision of that budget mandates an increase in California personal income tax. In conjunction with the increase, the State recently issued new tax withholding tables.

LACERA retirees and survivors who elected to have California tax withheld from their allowances based on tax tables (rather than on a designated amount) saw an increase in the amount of state tax LACERA withheld from their May allowances. The increase will remain in effect going-forward.

You may adjust your withholding elections as often as you wish; however, keep in mind, if you elect to have less state tax withheld, you may encounter a higher than expected tax bill on April 15th.

To adjust the amount of state tax LACERA withholds from your monthly allowance, you must file a new Form DE -4P with LACERA. The form is available on the Brochures & Forms page of lacera.com.

Note: In compliance with Federal law, California income tax is not withheld from your retirement allowance if you reside outside of California. However, if you are receiving other income from California that is subject to state tax, you may elect to have LACERA withhold taxes from your retirement allowance to satisfy your other California obligation.

For more information on this topic, visit the California Franchise Tax Board web site.

Consult with a professional advisor regarding tax matters; LACERA does not offer tax advice.

6/24/09