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Noticed more federal tax taken out of pension check. Did withholding go up?

Yes. The withholding tables in effect 12/2009 were juiced to pass on the full year benefit of the Making Work Pay Credit in 6 or 7 months. The 2010 tables, which are less than the tables in effect 1/2009, spread the effect of the credit over the full year.

Now, here's what matters for you. Although your withholding is affected by the credit you don't get the credit when you file your return. That means you could be as much as $800 underwithheld when you file your 2010 return. You may also see this problem on your 2009 return when you prepare it.

Rule Your Retirement Home Fool
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