Federal Income Tax Withholding

Defense Finance
and Accounting Service
Providing payment services of the U.S. Department of Defense

Federal Income Tax Withholding

Your federal income tax withholding, or FITW, is determined by the DD Form 2656 you completed at the time of your military retirement or by subsequent W-4 Form on file with DFAS. This information establishes the marital status, exemptions and, for some, non-tax status we use to calculate how much money to withhold from your taxable income for your annual tax liability.

The IRS has publications and tax calculators you can use to help determine what you should claim on your W-4 to minimize tax payments required when you file your tax returns.

Changing your FITW

Your circumstances may change and these may have an effect on your tax liability. When this happens, submitting a new W-4 (for retirees) or W-4P (for annuitants) can help adjust your FITW accordingly. You should talk to a tax advisor or review IRS guidance before doing so.

Once you have determined what marital status and exemptions suit your specific situation, you can complete a new W-4 or W-4P and mail the signed form to us at the addresses listed below.

If your FITW isn’t enough to satisfy your tax obligations, you may choose to have an additional amount withheld. Some may also elect to have a flat amount withheld by writing “Withhold additional FITW only” on their W-4 or W-4P.

The easiest, most secure and fastest way to change your tax withholding is by using your myPay online account.  All the information you would include on your W-4 or W-4P can be provided via myPay’s secure connection on your home computer.

W-4s and W-4Ps may be mailed or faxed to:

W-4 Form for Retirees:
Defense Finance and Accounting Service
U.S. Military Retirement Pay
P.O. Box 7130
London, KY 40742-7130

Fax: 1-800-469-6559

W-4P Form for Annuitants:
Defense Finance and Accounting Service
U.S. Military Annuitant Pay
P.O. Box 7131
London, KY 40742-7131

Fax: 800-982-8459

Filing a Withholding Exemption

If you claim your retirement pay should be entirely exempt from Federal Income Tax Withholding (FITW), the IRS requires that you re-certify this status each year by submitting a new W-4 Form no later than Dec. 15 of each year. If you do not re-certify your "Exempt" status, your FITW status will default to "Single" with zero exemptions as of your Feb. 1 payment. Please allow 30 days for processing of your request.

Tax Tables

If you are considering filing an updated IRS Form W-4, please talk to your tax advisor or use the following IRS links to determine the amount of your tax liability at the end of the year. 

• IRS tax withholding calculator
• IRS Publication 919 - How Do I Adjust my Tax Withholding?
Page updated October 6, 2011