AUSA reviews key issues with lawmakers

AUSA reviews key issues with lawmakers

Sunday, May 1, 2011

AUSA meets with top House lawmakers. AUSA Director of Government Affairs Bill Loper, joined other military and veterans organizations at the Capitol to meet with Minority Leader Nancy Pelosi, D-Calif., and 17 other key members of Congress to discuss each of the association’s top legislative goals.Association representatives urged support for a number of legislative initiatives such as expansion of economic opportunities for veterans.  One Congressman noted that he would like to see trade unions hire more veterans for apprenticeships. He also believes that veterans should get hiring preference on defense contracts. Other topics raised were improvements to benefits such as the Survivor Benefit Plan/Dependency and the Indemnity Compensation Offset and concurrent receipt. AUSA continues to strongly support full concurrent receipt for all disabled military retirees including those who were medically retired before completing 20 years of service (Chapter 61).More help for military homeowners? AUSA President Gen. Gordon R. Sullivan, USA, Ret., wrote a letter to Rep. Gerry Connolly, D-Va., thanking him for introducing legislation (H.R. 237) that would amend the Homeowners Assistance Program (HAP) of the Department of Defense to create more flexibility in setting a commencement date for homeowner assistance to members of the armed forces.The American Recovery and Reinvestment Act of 2009 extended provisions of the HAP to military personnel who receive permanent change of station (PCS) orders to a location more than 50 miles from their current duty station, whose orders are dated between Feb. 1, 2006 and Sept. 30, 2012 and whose home was purchased before July 1, 2006.While grateful for the inclusion of eligible military personnel, AUSA believes that the July 1, 2006 date, while within the beginning of a diminishing housing market, excludes many military personnel who purchased prudently after that date, perhaps expecting not to make money, but not envisioning the "once in a century" loss of value that occurred after the summer of 2008. While in the past, most PCS occurred after three years, in this time of war and repeated deployments, many are occurring after only two years. Service members who bought after July 2006 and in 2007 are now facing home sales in a dramatically altered housing market. Unlike civilians, military personnel cannot quit their job if they cannot afford to sell their home, and foreclosure or failure to maintain good credit by military personnel can result in loss of security clearance and in some cases loss of rank. Our volunteer military force, willing to fight for our nation, should not be forced to forego the benefits of homeownership or be penalized for being homeowners. Amending the effective date of the HAP PCS program to one that better reflects the date of the catastrophic housing market downturn in different housing markets, will provide help to many more military personnel. Add your voice to ours and send a letter to your members of Congress urging them to cosponsor H.R. 237. Go to the AUSA Web site, www.ausa.org, click on "Legislative Agenda," then click on "Contact Congress."  Type in your zip code beside "Elected Officials" and scroll down to "Support H.R. 237, Bill to amend the Homeowners Assistance Program."Why is my retired pay lower? We’ve received several inquiries from retirees about a reduction in retired pay.Information below, from the Defense Finance and Accounting Services (DFAS) offers an explanation of the changes affecting you, and some information on what you can do if you want to change your withholding.Expiration of Making Work Pay Tax CreditThe American Recovery and Reinvestment Act of 2009 contained The Making Work Pay tax credit. This credit temporarily boosted paychecks in 2009 and 2010 by reducing the Federal Income Tax Withholding rates and also the amount of taxes refunded at the end of the year.Although the credit was only intended to apply to wage earners, military retirees received it because federal law classifies military retired pay as a wage, not a pension.The Making Work Pay tax credit was designed to act as a special stimulus payment to help kick start the economy out of recession by putting some extra money in citizens’ hands right away. It expired Dec. 31, 2010 and tax tables reverted back to previous levels.Lower Threshold for Tax WithholdingIf you did not have any Federal Income Tax withheld from your pay last year, but are now showing withholding for 2011, it is because federal tax legislation enacted in December lowered the withholding threshold for tax year 2011.This means that you now become subject to Federal Income Tax withholding at a lower income level than in previous years.Social Security WithholdingSome of you were surprised by the increase in your withholdings because you heard news reports that workers would pay lower taxes in 2011.Those reports referred to a 2 percent reduction in American workers’ Social Security withholding. Because we don’t withhold social security from your military retirement payments, that change doesn’t impact military retirees or annuitants.The EffectsOverall, the new tax table affected more than 1.56 million military retirees and, in most cases, caused a decrease in net pay. You will see these changes reflected in your March 1 payment.These net pay decreases have already been posted on myPay and new Retiree Account Statements have been mailed out.The IRS is responsible for the changes to these Federal Income Tax Withholding tables, based on laws enacted by the United States Congress.On average, Federal Income Tax withheld from retirees’ pay has increased between $30 and $40 per month. Seeing less money in your pay is never fun, but there are things you can do to change the amount of pay you receive.After consulting a tax expert or the IRS, you may want to change your withholding.How to Change Your WithholdingTo change your Federal Income Tax Withholding, do so using myPay or by completing an IRS Form W-4 and faxing or mailing it to DFAS: Defense Finance and Accounting Service, U.S. Military Retirement Pay, P.O. Box 7130, London, KY 40742-7130. Fax: (800) 469-6559Keep in mind that changing your withholding does not change your tax liability and you will have to pay any remaining amount owed when you file your return next April.