Under federal tax law, benefit payments are subject to federal income tax withholding unless you choose otherwise. At retirement, your Area Administrative Office sends you a Benefit Election Packet that contains the forms you use to make your retirement decisions.
Your Benefit Election Packet also contains Internal Revenue Service forms including the Withholding Election Form. Use this form to choose whether or not you want federal income tax withheld from your monthly benefit payment.
Before completing this form, be sure to review the Internal Revenue Service Notice to Payee of Withholding of Federal Income Tax from Periodic Pension Payments. Then send your completed Withholding Election Form back to your Area Administrative Office (not to the Internal Revenue Service).
If you live in a state where you are subject to state income tax, you must also complete a State Income Tax Withholding Form (included in your Option Election Packet).
Contact your tax advisor if you have questions about how much to withhold or how your Plan benefits should be reported to the Internal Revenue Service each year.
By January 31 each year, your Plan sends all retirees and beneficiaries Internal Revenue Service Form 1099R. This form shows the total amount you received from the Plan during the past calendar year. It also shows the amounts of any federal or state taxes withheld from your benefits that year.
Prudential Financial automatically sends you a statement twice each year showing the total benefits you received for the prior six-month period.
If you want to change your withholding decisions after you retire, contact Prudential Financial by calling their toll-free number (800) 336-3387.