Tuesday, March 13, 2012
FROM THE E-MAIL SECTION: Your $6,000.00 Police/Fire Death benefit.... Is no longer $6,000.00 It's now $4,800.00 after the tax deduction
I think most of us have thought that there is a $6,000.00 death benefit that the surviving spouse or designated beneficiary receives upon the Chicago police department insurer's death. Not any more. A short time ago, a IRS change was made that mandates that the Chicago Police Pension Board takes out 20% of the $6,000.00 and submits it to the U.S. GOVERNMENT. That leaves the designated beneficiary with about $4,800.00 in actual dollars. I spoke with an employee of our pension staff Monday and he said that depending on your IRS tax rate, the beneficiary may get some of that $1,200.00 back in the form of a tax over payment, or not. The beneficiary will receive a form 1099 indicating the withholding and it will be their responsibility to include the form 1099 from the IRS/Pension Board when filing their federal taxes. He could not give a reason as to why the withholding was increased from ZERO to 20% other than it was a change mandated by the IRS. You must remember, the GOVERNMENT is NOT your friend with the current administration. If you have any questions, call the Chicago Police or Chicago Fire Department Pension Board office. If the person you speak to has no knowledge of this change, ask to speak to some one who does actually know, the first person I spoke to was not aware of this and had to ask some one else in the office.