Clarification on a couple of issues related to the $1000/$2000 one-time Lump Sum Payment which is to be received in the July 20 paycheck:
IF RETIRING AT THE END OF JUNE:
- We have confirmed with OLR that members retiring June 30/July 1 are eligible for the Lump Sum Payment
- The payment will be paid in the July 20 check
TAXES AND THE LUMP SUM PAYMENT:
- The one-time Lump Sum Payment is a taxable event (on the Federal level, it is taxed as a "bonus", usually 25%).
- The Federal Income Tax Withholdings can be adjusted by changing your W-4 for the payperiod (and you would need to submit a follow-up W-4 to revert back on proceeding paychecks). (Guidance On Changing W-4 for those interested)
- The CT Income Tax rate on the "bonus" is the same as regular wages.
- Your overall tax burden for the year will not change regardless of any changes you make to your withholdings.
PAYCHECK CHANGES:
June 22 Paycheck - Final Furlough withholding
June 22 Paycheck - Final "pension payback" withholding
July 20 Paycheck - One-time Lump Sum Payment included
July 20 Paycheck - Longevity payment included (delayed from April 2018)
* For the rare "July Anniversary" people, the Top Step Payment would also be included during the July 20 paycheck, but again, this is ONLY for the very few, highly uncommon "July Anniversary" people. The great majority of people are "January Anniversary" people and therefore the Top Step Payment will be made in January 2019.