Ohio lawmakers working to stop tax surprise for pensioners in 2010

COLUMBUS — Two Republican state lawmakers want to send a message to the federal government and save Ohio retirees from surprise tax bills in 2010.

State Sen. Jimmy Stewart, from Albany in southeast Ohio, and state Rep. Josh Mandel, from the Cleveland area, plan to introduce concurrent resolutions in their respective chambers urging the Internal Revenue Service to withdraw recently revamped income tax withholding tables covering pensioners.

The situation stems from the federal economic stimulus package OK’d by Congress and signed by President Barack Obama earlier this year. Included in the legislation was a credit that reduced the total federal tax withholdings on workers’ paychecks by about $8 per week.

The credit applies to earned income but not Social Security, pensions and other unearned income. The IRS, however, provided the same withholding tables to all employers, meaning retirees are receiving the credit, though their unearned income does not qualify for it.

That means retirees are receiving more in Social Security and pension checks now but will have to repay the extra dollars at tax time next year unless they contact their retirement systems and have their withholding amounts changed.

For the complete story, see Saturday’s Vindicator and Vindy.com