Social Security retirees will be the first contributors to feel the effect of the new retention tables, which will be implemented this month, with the change coming along with the 3.57% interim increase in pensions.
Social Security retirees will receive their pension this Monday, having already been processed with the rules of the new IRS withholding tables which, unlike the tables in effect until now, operate on a similar logic to that for the annual calculation of the tax. .
For many retirees, the new retention model will translate into a reduction in tax paid monthly (in the form of an advance). For example, a pensioner (not married) with a pension of 1,200 euros gross would receive a net amount of 1,050 euros, after the abolition of withholding tax at the rate applied until now.
With the new IRS table, this pension of 1,200 euros gross would deduct 130.89 euros in taxes, resulting in a net amount of 1,069.11 euros (19 euros more than the previous months).
However, July is also the month in which pensioners (with pensions up to 12 Social Support Indexes – IAS) receive the interim increase of 3.57%, which means that pensioners have a pension of EUR 1,242.84 gross.
Combine this increase with the new retention tables and this pensioner will receive a net amount of 1,100 euros, which is 50 euros more than the amount he received in June.
However, this increase in monthly net income will result in a lower IRS refund for many people in about a year’s time, as part of it is due to the reduction in the monthly tax paid.
Source: DN
