Tax change notices
The latest and upcoming tax changes may affect your retirement income, including your total tax withholding and net payment amount of existing payments on file. Review the updates below to understand the tax changes for your state.
Contact us if you would like to update your tax withholding information or have any other questions.
| State or Federal Tax | Description of Change | Impact to Tax Withholding for Existing Pension Payments on File | Date of Change |
|---|---|---|---|
| Iowa Residents | Eligible for rollover payments require mandatory 3.8% state tax withholding. | If you have a percentage on file or have less than the mandatory 3.8% for state tax withholding on an existing payment, state tax withholding will be updated to the default of 3.8%. | February 2026 |
| Oklahoma Residents | Oklahoma state tax withholding rate in wage calculation for pension payments is changing from 4.75% to 4.50%. | If you have a percentage on file for state tax withholding on an existing payment, state tax withholding will be updated to 4.50% (nonperiodic payments). | February 2026 |
| North Carolina Residents | North Carolina state tax withholding rate in wage calculation for pension payments is changing from 4.5% to 4.0%. | If you have marital status and exemptions on file for state tax withholding on an existing payment, state tax withholding will decrease due to lower wage calculation rate. | February 2026 |
| Nebraska Residents | Eligible for rollover nonperiodic payments require Nebraska mandatory 3.5% state tax withholding. | If you have a percentage on file or have less than the mandatory 3.5% for state tax withholding on an existing payment, state tax withholding will be updated to mandatory 3.5% (nonperiodic payments). | February 2026 |
| California, Maine and Vermont, Residents | State tax wage tables, allowances and/or deductions updated. | If you have marital status and exemptions on file for state tax withholding on an existing payment, state tax withholding will likely decrease due to wage calculation changes. | February 2026 |
| Federal | Withholding on Certain Distributions Under Section 3405(a) and (b): Federal taxes for US Citizen sourced income being paid aboard will now have new default withholding.
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For not rollover eligible payments nonperiodic pension payments you are not permitted to elect to have federal income tax withheld at a rate of less than 10% on any payments to be delivered outside the United States and its territories.
For not rollover eligible payments periodic pension payments if you are a U.S. citizen or a resident alien, you are not permitted to elect not to have federal income tax withheld on payments to be delivered outside the United States and its territories. |
January 2026 |
| Connecticut Residents | Connecticut is a voluntary state and no longer has a state withholding rate for periodic and nonperiodic pension payments. | If you have marital status and exemptions or state rate of 6.99% on file for state tax withholding on an existing payment, state tax withholding will be updated to the default of no withholding ($0). | January 2026 |
| Kentucky Residents | Kentucky voluntary state tax withholding rate for pension payments is changed from 4.00% to 3.5%. | If you have a state tax withholding of 4.00% on file for an existing payment, state tax withholding will be updated to 3.50%. | January 2026 |
| Georgia Residents | Georgia state income tax rate changed from 5.19% to 5.09%. | If you have a state tax withholding of 5.19% on file for an existing payment, state tax withholding will be updated to 5.09%. | January 2026 |
| Georgia Residents | Georgia state income tax rate changed from 5.39% to 5.19%. | If you have a state tax withholding of 5.39% on file for an existing payment, state tax withholding will be updated to 5.19%. | September 2025 |
| Idaho Residents | Idaho voluntary state tax rate for pension payments is changed from 5.80% to 5.30%. | If you have a state tax withholding of 5.80% on file for an existing payment, state tax withholding will be updated to 5.30%. | September 2025 |
| Oregon Residents | State tax wage tables, allowances and/or deductions updated. | If you have marital status and exemptions on file for state tax withholding on an existing payment, state tax withholding will change due to wage calculation changes. | April 2025 |
| Kansas Residents | Wage calculation will be removed as an option for state tax withholding on pension payments. These are voluntary withholding states. | If you have marital status and exemptions on file for state tax withholding on an existing payment, state tax withholding will be updated to the default of no withholding ($0). | April 2025 |
| Mississippi Residents | Mississippi state tax withholding rate for pension payments is changed from 5.00% to 4.4% for premature distributions under 59 ½. | If you have a state tax withholding of 5.00% on file for an existing payment, state tax withholding will be updated to 4.4% on premature distributions. | April 2025 |
| Arkansas, Michigan, Nebraska and Vermont Residents | State tax wage tables, allowances and/or deductions updated.
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If you have marital status and exemptions on file for state tax withholding on an existing payment, state tax withholding will change due to wage calculation changes.
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March 2025 |
| Federal | Federal tax wage tables updated.
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If you have marital status and exemptions on file for federal tax withholding on an existing payment, federal tax withholding will likely decrease due to wage calculation changes.
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February 2025 |
| California and Maine Residents | State tax wage tables, allowances and/or deductions updated.
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If you have marital status and exemptions on file for state tax withholding on an existing payment, state tax withholding will likely decrease due to wage calculation changes.
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February 2025 |
| Colorado, Illinois, Rhode Island, South Carolina, Utah, West Virginia and Wisconsin Residents | Wage calculation will be removed as an option for state tax withholding on pension payments. These are voluntary withholding states.
Colorado will no longer have whole dollar rounding for state tax withholding. |
If you have marital status and exemptions on file for state tax withholding on an existing payment, state tax withholding will be updated to the default of no withholding ($0).
Colorado will no longer have whole dollar rounding. |
January 2025 |
| Georgia Residents | Wage calculation will be removed as an option for nonperiodic pension payments. | If you have marital status and exemptions on file for state tax withholding on an existing nonperiodic payment, state tax withholding will be updated to the default of no withholding ($0). | January 2025 |
| Hawaii Residents | Hawaii no longer supports 1099 withholding and is a no withholding state. | If you have state tax withholding on an existing payment, state tax withholding will be updated to mandatory no withholding ($0). | January 2025 |
| Massachusetts Residents | Wage calculation will be removed as an option for nonperiodic pension payments.
Percentage will be removed as an option for state tax withholding on periodic pension payments. |
If you have marital status and exemptions on file for state tax withholding on an existing nonperiodic payment, state tax withholding will be updated to the default of no withholding ($0).
If you have a percentage on file for state tax withholding on an existing payment, state tax withholding will be updated to the default wage calculation. |
January 2025 |
| Michigan Residents | Wage calculation will be removed as an option for nonperiodic pension payments. | If you have marital status and exemptions on file for state tax withholding on an existing nonperiodic payment, state tax withholding will be updated to the default of 4.25%. | January 2025 |
| New Mexico Residents | New Mexico is a voluntary state and no longer has a state withholding rate.
Wage calculation will be removed as an option for state tax withholding on pension payments. No minimum withholding. |
If you have marital status and exemptions or state rate on file for state tax withholding on an existing payment, state tax withholding will be updated to the default of no withholding ($0).
New Mexico will no longer have minimum withholding. |
January 2025 |
| Vermont Residents | Percentage will be removed as an option for state tax withholding on pension payments. | If you have a percentage on file for state tax withholding on an existing payment, state tax withholding will be updated to default withholding. | January 2025 |