Retiree Tax Information
2019 Federal Tax Withholding Update
The IRS has issued new 2019 tax tables for federal income tax purposes. The new rates will be effective with the January payments (checks and ACH’s payable on January 31, 2019). The State of Wisconsin tax withholding rates are not changing at this time.
1099-Rs:
Forms 1099-R (tax reporting for your pension payments, similar to the W-2 you received as an active employee) for the tax year 2018 will be mailed no later than January 31, 2019. (All 1099R’s will be mailed on the same date, but they may arrive at your address at different times. The post office will be delivering millions of these forms at about the same time, so there is a possibility your form might be delayed in the mail.)
If you have not received your form by February 15, 2019, please call the ERS office to request a replacement. Please note that these forms are produced and mailed offsite; therefore, they will not be available on a walk-in basis. Requests will be processed in the order received.
1099-R forms may be returned to our office if we do not have your current mailing address – including seasonal moves. As we mentioned in several previous newsletters, ERS cannot take address changes over the phone. A change of address form is available on our website or you may change your address through Member Self Service. In addition, you may call our office and request a change of address form or simply take a standard-sized sheet of paper and provide the new information by mailing it in. Be sure to include your printed name and signature.
If you are a recent retiree and you received a GPS lump-sum bonus during 2018 and elected to rollover all or part of your GPS lump sum bonus, you will receive a separate 1099-R for your GPS lump sum bonus rollover. If you elected to receive all or part of the GPS lump sum bonus in cash, the payment you received in cash will be included with the 1099-R containing your monthly annuity payments.
If you receive multiple benefits from the ERS (e.g. your own benefit as well as a survivorship benefit from the account of your deceased spouse), you will receive a separate 1099-R for each benefit you received in 2018.
If you receive a Duty Disability benefit from the ERS, you do not receive a 1099-R because this benefit is not taxable or reportable to the IRS.
If you owe additional income tax this year or are getting a large refund, you might want to adjust the amount of your tax withholdings. You may download the tax withholding form from our website at: www.cmers.com under “Forms” – “Other” – “Tax Withholding Form.” If you do not have internet access, you may contact the ERS office, and we will mail you the required form.
The ERS staff is not allowed to give tax advice or answer tax questions. We cannot recommend how much you should have withheld or tell you if you need to file a tax return. Please consult the applicable IRS instructions or a tax professional. There are taxpayer assistance programs, often at no cost, through organizations such as AARP and Volunteer Income Tax Assistance (VITA).
1095-Bs:
Note for Retirees with the City’s Health Insurance: As a health plan sponsor, The Affordable Care Act (ACA) requires the City of Milwaukee to send out Form 1095-B to retirees who have health insurance coverage through the City. Please note that you DO NOT need this form to file your taxes; however, you should keep Form 1095-B with all your tax records as supporting documentation. This form is only used to verify medical coverage to the IRS that you (and your covered tax dependents on your federal income tax filing) had health insurance coverage during the year—no amounts are listed on this form. If you need to reference year-to-date deductions that occurred during 2018, please refer to your December 2018 payment stub. Receiving Form 1095-B does not mean you owe income taxes on the value of the health care benefits you receive. Please note that additional benefits such as dental plans, life insurance or disability (through the ERS) do not need to be reported to the federal government and will not be included on Form 1095-B. If you have not received this form by February 15, 2019, please contact our office.
2019 CPI COLA Factor is 2.1766%
(This only affects certain Police and Fire Retirees)
Every December, the ERS calculates the rate to be used to determine COLA factors granted to most protective service members based on the Consumer Price Index – All Urban Consumers (CPI-U). In November of 2018, the index was 252.038 as compared with 246.669 in November of 2017, an increase of 2.1766%.
The CPI COLA is calculated using the Consumer Price Index – All Urban Consumers data. The CPI statistics can be found on the U.S. Department of Labor Statistics website:http://data.bls.gov/cgi-bin/surveymost?cu Select the first index in the list presented on the website. Take the current year’s November 2018 index number and subtract the November 2017 index number. Divide this answer by the November 2017 index number.
COLA increases granted in calendar year 2019 to those protective service members whose COLA is determined by the CPI-U will be 2.1766%.
Retiree Insurance Updates
Life Insurance:
For members who retired after January 1, 2014, some of you will notice that your life insurance deduction will increase in January 2019. Rates increase in “5 year bands” – ages 50-54, 55-59, 60-64, etc. In other words, the year AFTER you turn 55, 60, 65, 70, etc. your premium rates will increase and will not increase again for the next 5 years. For example, if you turned 65 on ANY DAY IN 2018 (except January 1), your rates will go up in January 2019.
And for ALL retirees who carry life insurance with the City, please remember to update your beneficiaries with us if you have any life changes that you need to share. The Pension Office and Life Insurance do not use the same Beneficiary Form, so please remember to update both. You can call our office to request the forms if you cannot print them off our website.
If you need clarification, feel free to call 414-286-3557 and ask for Life Insurance.
Health Insurance: (excluding MPS, MATC, MMSD, UWS and Veolia)
REMINDER: NON-MEDICARE MEMBERS who are continuing City of Milwaukee health benefit coverage can continue to use your current UHC/OptumRx card in 2019. Questions? - Call the number on the back. The ERS does not send out cards.
MEDICARE MEMBERS who are continuing City of Milwaukee health benefit coverage for 2019 can continue to use your prescription card from United Healthcare MedicareRx and your health card from UHC. ERS does not send out cards.
If applicable, 2019 health benefit premiums will be reflected on your December 2018 pension check.
**Please look at your check stub or direct deposit notification before calling our office**