Adjusting Tax Withholding Amounts

Many relief associations use a default State tax withholding rate of 6.25 percent when paying pension benefits directly to a retiring member. Information about State tax withholding is provided on the Department of Revenue’s website. This page includes contact information for Department of Revenue staff, as well as a form for the retiring firefighter to complete to set their withholding rate or opt out of withholding on the distribution.

Information and a form for a retiring firefighter to file if electing to withhold more than 20 percent for Federal taxes can be found on the IRS website. Relief associations should consult with a tax professional or the IRS for guidance regarding required tax withholding and reporting on benefit distributions.

Last Updated March 2025