PERS Pension, OPSRP Pension, and IAP benefits are subject to both federal and Oregon state income tax withholding. If you are a legal resident outside of Oregon, check with your tax advisor on how your state taxes benefits. Non-Oregon residents must complete a W-4P for monthly payments or W-4R for lump benefit payments and elect out of Oregon withholding if you do not want Oregon income taxes withheld. A surviving beneficiary may owe State inheritance and federal estate taxes.
PERS will withhold federal and Oregon state tax from your monthly benefit check at the default rates determined by the IRS (single with no adjustments) and the Oregon Department of Revenue (single, zero exemptions). You may specify different withholding elections by completing an IRS Form W-4P. By January 31 of each year, PERS mails retired members one or more IRS Form 1099-Rs reporting the PERS benefits paid the previous year.
Before choosing a payment option, if one is available, PERS recommends you obtain tax information from the Internal Revenue Service and the Oregon Department of Revenue or a qualified tax advisor. Required minimum distribution rules and restrictions may apply to death benefits. Also, surviving spouse beneficiaries and non-spouse beneficiaries are subject to different time frames in which they must begin receiving benefits.