COME ON MEMBERS, TIME TO CALL THE CITY COUNCIL, GO TO THE OUR "ACT NOW" PAGE
COME ON MEMBERS, TIME TO CALL THE CITY COUNCIL, GO TO THE OUR "ACT NOW" PAGE
If you are a FDNY firefighter and are planning for retirement, this article may provide some helpful tax information to be aware of. I will go through and list some of the differences in taxation you will see as an active-duty firefighter compared to a retiree. The topics mentioned include the change in FICA taxation, benefits for members who retire in NY state or in a state with no income taxes, some of the effects of moving to a different state, and a tax planning strategy that may be worth considering.
Starting off on a positive note, when it comes time to retire and you switch from earning a paycheck to collecting a pension, you will notice a significant change in tax withholdings. Social Security and Medicare taxes – known as FICA applies to earned income but does not to pension income. Therefore, you will not see FICA taxes being withheld from your pension check. To give context, for someone earning under the wage base limit, which was $142,800 in 2021, the FICA tax represents 7.65% of income (for those earning above the wage base the FICA tax progressively becomes a lower percentage of income). Additional good news is that FICA tax also does not apply to withdrawals from retirement accounts like the 457 or an IRA. It is important to note however that if you continue to work in another job once retired you will pay FICA taxes income earning from that job.
Another positive note is that unlike when you are actively working, pension income is not subject to state or city income taxation in New York State. For those residing in the five boroughs, state and city income taxes combined can often amount to 6-8%+ of income, and for those living outside NYC state taxes can still represent 4-5% or more. These state and local benefits can also apply to retirement accounts that are considered pension plans such as excess pension contributions and UFA and UFOA annuities. So, in addition to not owing FICA taxes on your pension, you will also not owe state or city income taxes on your pension if you stay in New York State in retirement or move to a state with no income tax or that does not assess taxes to New York public pensions. If you want to consider moving to a different state that charges income taxes, you will want to work with your accountant or tax advisor to determine the tax consequences to doing so.
There are additional tax benefits that can make New York a friendly tax state for FDNY retirees. The first is that social security benefits are not subject to taxation in New York. The second is that those aged 59.5 and older are able to deduct $20,000 on their state tax return each year from retirement income. This can be an added tax benefit if you would like to take a withdrawal from a retirement account like the 457 or an IRA, or when it comes time to start taking required minimum distributions. You will also want to consider these tax benefits if you are considering moving to another state in retirement. One way for someone to save even further in state taxes upon retirement would be to move to a state that does not have an income tax like Florida. But for those who maintain their residence in New York there are many benefits the state offers, particularly to retirees with public pensions.
One tax planning strategy that may be worth considering for retired FDNY members is converting retirement funds into a Roth IRA. This can work particularly well for FDNY members who qualify for a disability pension in which most of their income is federally tax free and if they have accrued a significant balance in retirement accounts that will be subject to required minimum distributions (RMD’s) in the future. By converting some money each year in between the time of their retirement date and when they start collecting social security and RMD’s from retirement accounts, a retired FDNY member can pay taxes as they go and shift money from taxable accounts into a tax-free account. This strategy requires careful planning and should be discussed with a tax advisor before being executed.
As listed in this article, there are many tax benefits in place for FDNY retirees including not owing FICA taxes on their pension, not owing state or local taxes on their pension or pension retirement accounts if they stay in New York or move to a state that does not charge income taxes on public pensions, and for those who stay in New York additional benefits include not paying state tax on social security and getting a tax break on the first $20,000 in withdrawals in retirement accounts for those 59.5 and older. These various benefits can help FDNY retirees keep more of their hard-earned retirement benefits. For those contemplating moving to another state, they should work with their tax advisor to determine the additional tax costs or benefits associated with changing their state of residence.
*Disclosure this article does not constitute tax advice and we would advise you to work with a tax professional to discuss any of these topics further
The list of First Due Responders dying from 9-11 exposure continues to grow. The Feal Good Foundation honors them all by etching their names into Monuments at their Memorial Site.
Donation are needed to continue to honor these men and women.
Click on the "DONATE NOW" button to help fund future walls.
To view their website, >CLICK HERE<
FDNY Firefighter Carmelo “Carmine” Puccia was killed tragically on January 6, 1970, when he was struck by a subway train while investigating a trash fire on the tracks. His death was mourned, and then it passed into history for nearly everyone—except the family he left behind and some of his closest co-workers.
Flash forward to 2019. Captain Brendan Connolly, assigned to the FDNY’s Subway and Extrication Unit, became aware of Firefighter Puccia’s tragic death. He pledged to memorialize Firefighter Puccia’s sacrifice by dedicating the FDNY’s subway training prop
to Firefighter Puccia.
The incredible work of Captain Connolly and his staff—along with the story of who Firefighter Carmelo Puccia was—is captured in the NFFF’s latest podcast, After Action Review Series—
Red Light, Green Light, Blue Light.
The podcast is a two-part installment and tells Firefighter Puccia’s story through the recollections of the two groups most affected by his loss: his family and his department. Viewers and listeners will gain insight into Firefighter Puccia as a husband, father, and firefighter—and witness FDNY’s solid determination that we will never forget.
Check your pension statements for Catastrophic Insurance
Pension Deductions-
It has come to the UFOA’s attention that pension deductions for catastrophic insurance premiums to Mercer may not have taken effect after a member retired or may have stopped since a member’s pension was reclassified. All retired members are urged to review their quarterly pension statement to verify that catastrophic insurance premiums are being deducted. The pension deduction code for catastrophic insurance premiums on the pension statement is CHIP MISC. If premium payments are not being deducted from your pension, you should contact Mercer immediately at 1-800-503-9230, option 2 and make alternate payment arrangements to bring their account up to date. You may also request that Mercer resume the premium deductions through monthly pension deductions. The UFOA does not process pension deductions or catastrophic insurance premium payments to Mercer.
WHAT'S ON THIS PAGE?
-OUR MEETINGS INFORMATIVE AND FUN!
-MEETING LOCATIONS
~Volunteers for the Fire Museum~
-Counseling Unit Breakfast Schedule~
AND
How to Join the
Retired Members Association -JUST GO TO THE HOME PAGE
We always bring in interesting and informative speakers to address you on the issues at hand. See above, Leroy McGinnis from the UFA at a meeting last year. This past year we have had others speak about wills and trusts, health care, pension issues, upcoming events etc. Jimmy Hayhurst asks all to contribute to Building Homes for Heroes and the response is always positive for our disabled war vets.
See above, Jim Hayhurst addressing a packed house at our meeting in New Hyde Park at the Elk's Club; 901 Lakeville Road. Our other location is in Brooklyn at the K of C Hall; 3051 Nostrand Ave [corner of Quentin Road and Nostrand Ave] We begin at 8pm and enjoy food and beverages but most of all we enjoy hanging out with friends. Make it a point to get to one
of our meetings,
we'd love to have you!
BECOME A VOLUNTEER AT THE FIRE MUSEUM
278 SPRING ST. NYC, NY
One day a week for a few hours plus ample parking.
Helps keep our great history alive to school children
Contact: Sarah Judd, Executive Director (212) 691-1303 est. 15
or Jim Vreeland, Volunteer (718) 833-6410
~
COUNSELING UNIT
STAY CONNECTED
BREAKFAST SCHEDULE
~Fort Totten CSU:
Fort Totten, Bldg 413B Bayside, NY 11361 (718) 352-2140 meets the 3rd Friday of every month. Meetings begin at 10:00am
~Deer Park Firehouse
94 Lake Ave. Deer Park, NY 11729 (631) 667-3500
meets 2nd Tuesday of every month. Meetings begin at 9:00am
~
~Staten Island: 1688 Victory Blvd Suite 101 Staten Is., NY (718) 815-4111 Meets the last Tuesday of every month , the location for the breakfast is Jimmy Max Restaurant 280 Watchoque Road
~Middletown CSU: 2279 Goshen Tpke. (845) 695-1029.
Meets the 2nd Tuesday of every month Meetings begin at 9:00am For further information: Contact Greg Smith at (212) 570-1693 ext-317
~
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