ALBANY, GA (WALB) – Changing tax laws have many retirees seeing red.
One change is forcing them to pay more federal income tax. While workers are getting more money in their checks as a result of a cut in their social security taxes, the changes are taking money away from retirees. Many of them didn't know the change was coming.
Some got a letter informing them of the change, others did not, they just got a smaller check. Many companies had until yesterday to make the changes which is why pension checks for retirees are short starting February 1, 2011.
Many retirees at the SOWEGA Council on Aging Senior Center downtown are on a fixed income. Their only source of income social security or a pension and it didn't talk long for many to notice that pension check is suddenly smaller.
"It causes ulcers, it causes all different kinds of sickness, because of worrying that we shouldn't ought to have," said Bobby Jenkins, former WG&L employee.
"I was very shocked and very upset," said Colleen Chappell, retired Dougherty County School employee.
That's because their cost for necessities isn't shrinking.
"Groceries are up, gas is up, everything you need is up, and then they cut our pay, just because they can I guess," said Chappell.
If you're lucky you received a letter with your check explaining it's the change with the Making Work Pay Tax Credit that caused the problems, the tax credit expired in December.
"That credit expired and in place of that with the 2010 relief act, a payroll tax cut has been put in place," said Miles Espy Sr, CPA with Draffin & Tucker, LLP.
That gives those who are still working a two percent cut on their Social Security withholdings, but for those without a job, and without the tax credit it means an increase in the amount of federal income taxes. While other tax cuts were extended.
"One of those being the deduction that teachers are allowed for educational expenses. There's the $1,000 dollar child credit there's also the child care tax credit," said Espy.
Many seniors feel they've been forgotten in the recent tax cuts.
"We've paid taxes all of our lives and then when they cut our pensions it hurts, it hurts," said Christine Jenkins, Bobby's wife.
A hurt they're likely to feel every time they get their check.
The letter also warns those with pension payments to review their state income tax withholding as well because the reduction in federal income tax withholding may also impact state figures.
You can consult with a tax preparer or find more information on the IRS web site at www.irs.gov.