JUST GOT APPROVED FOR CRDP - GOT QUESTIONS

nwlivewire

PEB Forum Veteran
#22
[associated with the post immediately preceding]

The six-year barring law.

There is a six-year barring law. The "six year barring law" is contained within 31 U.S. Code § 3702 - Authority to settle claims

https://www.law.cornell.edu/uscode/text/31/3702

Ron

FINAL UPDATE FINAL UPDATE FINAL UPDATE

CRDP RETRO DISBURSEMENT IS SCHEDULED FOR JULY 02, 2018

DFAS notified me via email that there was an accounting change. MY EMAIL SAID:

"You are getting this notification because a change has been made to your Net Pay or to your Arrears of Pay Beneficiary Election. This change will be reflected in the new Daily RAS, which can be found on your myPay account.".......

So I went to MyPay, and sure enough - DFAS SENT ME A NEW, ONE-TIME Retiree Account Statement where at the very bottom of the RAS it says, "THIS STATEMENT REPRESENTS A CRDP CREDIT. THIS STATEMENT IS BEING ISSUED AS A RESULT OF A SPECIAL PAYMENT."

As far as I have been able to estimate, DFAS DID go back 72 months and they ARE going to retro pay me RETRO CRDP. The gross figure they came up with is just about (very close to) what I estimated my GROSS CRDP backpay to be.

(I will request a copy of their audit just to be sure - thanks Ron!)

This payment will be in a lump sum (I'm assuming so) as DFAS only sent me this one RAS and it has a lump sum total figure on it for those 72 months of back pay.

This total shows the total GROSS amount, the total Federal taxable amount, and the total net pay amount.

It appears when I divided the net and gross, I was NOT TAXED at 28% - I was taxed at 32.33%.

I'm not sure what they (DFAS) bases their withholding on as it appears the DFAS phone guy was wrong on the flat 28% Fed tax he said would be withheld.

So it looks like from the time the DFAS audit was assigned in mid-May to my notification of a pending payment - this time period took almost six weeks.

But on Monday, July 02, I should be looking at a healthy deposit of backpay in my bank account.

OH HAPPY DAY!!!!

I can finally pay off all remaining US debts and get ready to begin my time in Thailand and SE Asia on schedule and as planned - and with no more debt stress.

Man, it's been a looooong six years - so this is really a BIG relief! It will feel really good to put all of this stuff back behind my rear view mirror.

V/R,
nwlivewire
 

RonG

PEB Forum Veteran
Registered Member
#23
Congratulations!

I am interested in "I was NOT TAXED at 28% - I was taxed at 32.33%." Are you having state taxes collected by DFAS? I know you were residing in a state that does not have taxes on income, but possibly you had made arrangements for taxes to be collected for another state at one time.

This is from one of the DFAS pages: The Federal Supplemental Rate for withholding is 25 percent.

You will likely receive a healthy tax refund at the end of 2018.

Regards,
Ron
 

nwlivewire

PEB Forum Veteran
#24
The RAS
Congratulations!

I am interested in "I was NOT TAXED at 28% - I was taxed at 32.33%." Are you having state taxes collected by DFAS? I know you were residing in a state that does not have taxes on income, but possibly you had made arrangements for taxes to be collected for another state at one time.

This is from one of the DFAS pages: The Federal Supplemental Rate for withholding is 25 percent.

You will likely receive a healthy tax refund at the end of 2018.

Regards,
Ron
The RAS that covers this CRDP backpay says at the bottom in ALL caps:

THIS STATEMENT REPRESENTS A CRDP CREDIT.

THIS STATEMENT IS BEING ISSUES AS A RESULT OF A SPECIAL PAYMENT.

**********

?????????? "SPECIAL PAYMENT" - an exception to the rule of 28% Fed tax withholding?????

**********

In the statement block entitled "PAY ITEM DESCRIPTION", this CRDP backpay money is registered by DFAS as a "MISCELLANEOUS CREDIT"

DFAS also places the entire amount as a "TAXABLE INCOME" amount (nothing unusual there - that's the CRDP standard).

The FEDERAL INCOME TAX WITHHOLDING amount is the ONLY tax that was taken from this gross amount because DFAS has my residency as Texas - a NO INCOME TAX state.


TOTAL GROSS: 65,248.70

FITW: 21,123.69

NET: 44,125.01

So 21,123.69 divided by 65,248.70 = 32.3741162% taxation rate

*** Just so you know because I am not a finance person, I have been claiming for these past years with DFAS a SINGLE and 5 for FEDERAL tax withholding on my W-4. This is because in the past (before I was just now fully CRDPed) my single and 0 status took out too much tax every month. My tax person and I figured out that in my case, that my going with a withholding of S/5, then this would allow me to break even on my annual FED tax obligation where I would not owe the FEDs and get back less than 100 bucks for an annual tax refund.

I will have to adjust my W-4 again after this year is up - now that I am being fully paid my CRDP - so I won't owe the FEDS at the end of the 2019 tax year.

But right now, I am still at S/5 with DFAS - which makes me wonder if I was taxed at THAT FED S/5 tax rate for this "MISCELLANEOUS CREDIT" lump sum payment.

I don't have an answer to this as I am not a finance guru - but just curious as to how they arrived at that tax withholding figure with the FEDS.

I just hope I didn't UNDERPAY - that's what I'm more concerned about with this lump sum payment.

V/R,

nwlivewire
 

RonG

PEB Forum Veteran
Registered Member
#25
25% Lump Sum Fed Tax Rate for withholding (Mil Pay)

6.2% social security + 1.45% medicare =7.65% total

25% + 7.65% = 32.65%

Note: CRDP is retired pay, restored

---
Ron
 

nwlivewire

PEB Forum Veteran
#26
25% Lump Sum Fed Tax Rate for withholding (Mil Pay)

6.2% social security + 1.45% medicare =7.65% total

25% + 7.65% = 32.65%

Note: CRDP is retired pay, restored

---
Ron
HMMMMMMM....

I am already collecting SSDI (qualified for SSDI in 2010 - retro to 2007 - THEN finally PDRL retired in APR 2012). The FEDs currently take out my Medicare premium every month before I receive my SSDI.

So IF I am taxed SOCIAL SECURITY/MEDICARE for this when I am already in receipt of SSDI (through the Social Security system) - then does this means that the Social Security Administration will have to recalculate and increase my monthly SSDI payment as this CRDP is SSA/Medicare taxed under "earned income"????

V/R,
nwlivewire
 
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RonG

PEB Forum Veteran
Registered Member
#27
I know little to nothing about SSDI. Receipt of CRDP is receiving retired pay.

CRDP is earned income and as such, is taxed.

Ron
 
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