How to Change Federal Withholding Taxes on AF Retirement Pay

Military retirement pay, including that of retired Air Force personnel, is subject to federal tax withholding. The amount withheld depends on the exemptions you claimed on your IRS form W-4 or the information you gave on your military pay data form upon retirement. If your circumstances have changed and you need to change the amount of federal taxes deducted from your AF retirement paycheck, you can easily do so.

Difficulty: Easy

Instructions

1. Figure out whether you need to increase or decrease federal taxes withheld from you. If you are getting a large refund or owing taxes, you may need to change your federal income tax withholding to either increase or decrease your exemptions. You may also be affected by the recent changes caused by the American Recovery and Reinvestment Act of 2009 and may need to change how much federal tax is taken from your retirement check.

2. Download and complete a new W-4 form. You will need to fill out a new W-4 and adjust the exemptions you claim accordingly. See a link in "Resources" below for a copy of the form.

3. Send the completed W-4 to the Defense Finance and Accounting Service (DFAS) this address:
   
   Defense Finance and Accounting Service
   U.S. Military Retirement Pay
   P.O. Box 7130
   London, KY 40742-7130
   
   You can also use the self-service option on the DFAS myPay website or fax a copy to 1 [phone].

4. Go to the nearest Air Force base or financial services office to update your federal withholding tax information in person. See links in "Resources" below for an Air Force Base locator tool and to DFAS locations.

References

• More about Federal Tax Withholding from the DFAS
• More on Military Retirement Pay Calculation
• IRS Withholding Calculator

Resources

• Air Force Base Locator
• IRS Form W-4
• DFAS Locations