Jordan, Tiberi letter to House Chairman Charles Rangel

Congress of the United States
Washington, DC 20515
April 3,2009

Chairman Charles Rangel
Committee on Ways & Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515

Dear Chairman Rangel,

We write today requesting clarification and corrective action on recent changes to IRS tax withholding tables that will adversely impact public and private retirees in Ohio and beyond.

The IRS recently issued new withholding tables in accordance with the American Recovery and Investment Act. The new tables instruct employers to reduce the withholding on earned income, pursuant to the "Making Work Pay" tax credit.

Though the credit only applies to "earned' income, the IRS compelled pension plans to use the new tables as well, even though pension disbursements are most often categorized as "unearned" income.

This change in federal tax policy will unnecessarily reduce the tax withholding on pension income, socking many retirees with an unexpected tax bill at the end of the year. Without a reconsideration and change of this policy, hundreds of thousands of retirees in Ohio and across the nation will face a higher federal tax bill at a time when they can least afford it.

We stand ready to work with you to address this change, and we welcome your cooperation and feedback in doing so. Please do not hesitate to contact George Poulios in Congressman Jordan's office at 202-225-2676 or Adam Francis in Congressman Tiberi's office at 202-225-5355 to begin this discussion.

Sincerely,

Jim Jordan
Member of Congress, Ohio 4th District

Pat Tiberi
Member of Congress, Ohio 12th District

Cc: Congressman Dave Camp, Ranking Member