By OJAG Code 16
Paydays for military retirees and those who receive portions of retired pay are changing
for September and December, as the DFAS changes its pay schedule to comply with the
2011 National Defense Authorization Act.
The 2011 NDAA requires military retiree pay to be processed on the first day of the
month. When that day falls on a weekend or national holiday, the pay date is moved to
the previous business day. Thus, the payment original scheduled for October 3, 2011 was
issued on September 30, 2011, and the payment scheduled for January 3, 2012, will be
issued on December 30, 2011.
This change affects regular retired pay, Concurrent Retirement and Disability Pay, and Combat Related Special Compensation. The new rule also applies to retiree allotments, garnishments and court-ordered former spouse and child support payments, but does not affect annuity payments.
Because the 13th payday falls within 2011, some retirees, including recipients of spousal
support, may see an increase in their 2011 tax liability. To avoid paying the increased tax
out-of-pocket, affected individuals should increase the amount the IRS withholds from
their income for the rest of the year. In 2012, the number of payments will return to 12,
and anyone who increased their tax withholding in 2011 should return to their “normal”
withholding amounts at the end of December.
If retirees need to make changes to their federal or state tax withholding, the quickest and
most secure way to do so is through myPay. Customers who cannot access myPay can
change federal withholding amounts by completing a new IRS Form W-4 or W-4P, or
change state withholding amounts using a DD 2866.
These forms can be found on the DFAS website www.dfas.mil/retiredmilitary/forms.html.
The forms either refer to “exemptions” or “allowances.” Although the terminology differs from form to form, decreasing the number means the IRS will withhold more money from each retirement payment.