Skip to main content

Jordan and Tiberi Urge Prevention of Unexpected Taxes on Ohio Retirees

May 13, 2009
Today, Congressman Jim Jordan (R-Urbana) joined Congressman Pat Tiberi (R-Genoa Township) in sending a letter to U.S. Treasury Secretary Timothy Geithner and Ways and Means Chairman Charlie Rangel (D-NY), with a copy sent to IRS Commissioner Douglas Shulman, alerting them of a harmful consequence of the "Making Work Pay" tax credit that would give seniors a bigger tax bill at the end of the year.

The oversight was brought to their attention after IRS officials released to employers the new withholding tables to implement the credit.  Withholding tables indicate the amount of payroll tax that should be withheld from an employee's paycheck. The IRS also instructed that the new tables be used for withholding tax on pensions.  Under the law however, the "Making Work Pay" tax credit does not apply to pension payments.

"This is yet another example of the resulting problems from haphazardly passing a thousand-page, trillion dollar spending bill without giving members time to read it," said Jordan.  "The victims here will be retirees that receive pensions. These recipients will receive the credits and be required to pay it back on April 15, 2010. Congressman Tiberi and I are demanding that Secretary Geithner and Chairman Rangel find a solution to this problem immediately."

The National Education Association, the American Federation of State, County, and Municipal Employees, and other pension systems have expressed their discontent with problem.

The "Making Work Pay" tax credit was included in the 2009 Stimulus bill that was signed into law in February. The 1,000+ page bill was rushed through the House and voted against by both members.