Retired Military & Annuitants
In addition to our newsletter, your end-of-year package may contain as many as three documents.
1. The Retiree Account Statement (RAS) dated Dec. 2, 2011 shows the increase in your gross and net pay resulting from the Cost of Living Adjustment (COLA).
2. The 1099R shows both your gross distribution and taxable retired pay for the 2011 tax year and includes all 13 payments in 2011.
3. The RAS dated Dec. 12, 2011 reflects the change in your net pay that will take place when the 2012 tax table goes into effect with your Feb. 1, 2012 payment. The year-to-date totals on this statement should match your 1099R.
The RAS with the Statement Effective Date of Dec. 2, 2011 in the top left corner shows the COLA you received beginning with your Dec. 30 payment. The COLA shows up as an increase in gross pay under Pay Item Description. The Year-to-Date totals on this statement don’t match your 1099R because this is not your final statement for 2011.
The RAS with the Statement Effective Date of Dec. 12, 2011 in the top left corner is your final statement for 2011. The Year-to-Date summary on this statement should match your 1099R.
The Dec. 12 RAS also shows the amount you’ll receive Feb. 1 (your first payment in 2012) in the New column under Pay Item Description. Any change in your FITW is due to the new tax tables for 2012.
After logging in to myPay, select “Annual or Changed RAS” on the Main Menu to view the Dec. 2 and Dec. 12 RASs described above.
Formerly, DFAS paid military retirees and those who receive portions of retired pay on the first business day of each month.
Now, we’re required to deliver those monthly payments no later than the first calendar day of every month.
That means when the first day of the month falls on a weekend or national holiday, we deliver your monthly pay by the last business day of the prior month.
The 2011 National Defense Authorization Act required military retiree pay to be processed by the first day of the month. This change prevents holidays and weekends from delaying your pay. And it puts military retirement pay on a consistent schedule with Military Pay, VA compensation and pension and Supplemental Security Income pay schedules.
DFAS will release payment to your bank on or before the first day of each month as described in Answer 1 above.
The IRS will use the dates we release payments to your bank to determine tax liabilities.
The date the money is posted to your personal account and becomes available for your use will vary from bank to bank, depending on their processing times and policies. Some banks take a day or more to post to your account, others post immediately. And some banks will even post in advance of a regular payment like retirement pay.
Please contact your bank or look at your bank statement to determine when your bank posts to your account.
My December pay has always been deposited to my credit union account by the end of December. So I didn't receive 13 payments in 2011. Why does my 1099R say I did?Some financial institutions credit members’ accounts for their monthly retirement check before the official pay date. While that’s a nice benefit, it does not affect your tax liability. The IRS bases taxes on when DFAS issues the pay (the official pay date), not when a bank posts it to your account.
For example, DFAS issued your December 2010 pay on Jan. 3, 2011. But even before the change in the law, some financial institutions credited members’ accounts on Dec. 30, 2010. Because the official pay date was Jan. 3, the IRS treats it as taxable income for 2011, even though the bank or credit union may have posted it to your account on Dec. 30.
Because Jan. 1 is always a federal holiday, going forward we will always process your January pay the previous December. Therefore, in 2012 and beyond, you will receive the normal 12 paychecks. Please see our pay schedule for 2011 and 2012 pay dates.