Government retirees who don't want federal tax to be withheld from their checks starting in April have only a few more days to complete the paperwork necessary to avoid the automatic deductions. There are about 60,000 federal retirees living here.
Unfortunately, many retirees still have not received the official optical-scanner form. It must be completed and returned by Feb. 9 to the private contractor, Westinghouse Information Services, hired by the government to handle the mammoth mailing, processing and coding operation.
The background: Congress last year said that, beginning in 1983, federal tax must be withheld automatically from the annuities of retirees unless they specifically opted for quarterly tax payments instead.
About 1.7 million people had to be notified of the new law, and given the option of continuing to pay taxes quarterly. The IRS gave the Office of Personnel Management until April to begin the withholding program.
OPM supplied address tapes to the private contractor and told it to get the word out. The contractor was to get in touch with those not now having any tax withheld, advise them of the new law and send them a form.
The form gave them the options of saying how much they want withheld automatically, or electing to continue to pay quarterly with no withholding. Under the rules, that form was to be returned to the contractor by Feb. 9.
A second mailing, sent by the OPM itself, went later to the 750,000 retirees who are already having federal taxes withheld from their checks. It gave them the option of changing their withholding rate if they wanted to do so. Retirees who do not want to change their withholding rate do not need to return the forms.
When the OPM/Westinghouse arrangement was reported here Jan. 13, many retirees called to say they had not received any forms. Others called and said they had thrown the letter away, since it came from Iowa City and did not seem "official." People from both groups are still calling.
On Jan. 18 and again on Jan. 23 this column advised retirees they could apply for duplicate forms (by writing OPM's Annuity Services Division, Allotment Center, P.O. Box 961, Washington, D.C. 20044). Many people did that. Some did it twice. Some are still calling to say they have received nothing.
OPM says that there was a minor foulup. It says there was a "blank" in the computer tape that resulted in 33,000 forms being mailed out late--that is this past Monday.
In addition, OPM says 20,000 retirees could not be contacted because the government does not have their current address--their annuities are electronically transferred to banks. More than that, OPM says that thousands of retirees got confused and sent in tax checks, county tax payments, and Social Security data rather than the forms.
Other retirees, OPM says, either filled out the forms incorrectly or used photocopies of a form sent to someone else (a no-no because the optical scanner cannot read a copy of the form).
All this is by way of saying that there have been some problems!
This is the status: OPM says the deadline for annuitants who are not now having tax withheld will not be extended. If the form is not returned by Feb. 9, your April annuity check will be subject to automatic withholding (at the rate of a married person with three withholdings). You can alter the amount of withholding in later months or opt for quarterly payments if you can show you missed the deadline through no fault of your own.
Retirees who get the forms today, Saturday or Monday may be able to meet the deadline. Those who don't meet the deadline, for whatever reason, will be subject to the new automatic withholding for at least the month of April.