Federal Income Tax Rates Went Down but Your Federal Tax Withholding Increased. Here’s Why…

Did Your Federal Income Tax Withholding Increase?

In the past few days, I’ve heard from several readers who noted that their federal income tax withholding has increased in 2011 despite the fact that 2011 income tax rates will be unchanged from 2010.

This situation has been made more confusing by the so-called Payroll Tax Holiday, which knocks 2% off your Social Security taxes. If income tax rates are the same, and your Social Security taxes have decreased, why has your withholding increased?

For starters, the Making Work Pay tax credit has expired. Unlike most income tax credits, which can be claimed when you file your taxes, the Making Work Pay credit was given out incrementally via reduced federal income tax withholding during 2010.

It’s also important to note that, the Payroll Tax Holiday is a separate issue entirely, and it affects a different line on your check stub. As I noted above, this affects your Social Security taxes, which are typically listed as FICA-OASDI on your check stub.

While the Payroll Tax Holiday went into effect on January 1st, the IRS has given employers until January 31st to implement the changes in their payroll systems, with an expectation that any over-withholding be rectified by the end of March.

So… If you’ve seen an increase in federal income tax withholding (or failed to see a decrease in Social Security withholding), you now know why.

186 Responses to “Federal Income Tax Rates Went Down but Your Federal Tax Withholding Increased. Here’s Why…”

  1. Anonymous

    I feel sorry for all the people out there that are ignorant enough to blame Obama for all their problems.

    1) presidents pretty much have little to no control over the government (they’re talking heads)
    2) every good thing Obama tried to get passed was blocked by the GOP.
    3) face reality.. wall street controls everything!

    Watch Jon Steward and you’ll understand things better

  2. Anonymous

    I didn’t qualify for the “making work pay credit” and also had to pay back the IRS the last 3 years and I make just shy of 30K a year, so this is taking almost $100 out of my monthly check for someone else’s pocket because the ones in charge can’t bear to give up their paid-to-be-useless salaries. If Congress wants to make some serious tax money, put it on stuff like cigarettes, beer, junk food and designer clothes, not on groceries and peoples’ hard-earned income. I understand we wouldn’t have things like emergency personnel, road repairs or schools without taxes, but again, those taxes should not be on things necessary to survive – and when the economy goes south it should not be the public-at-large who has to take it in the shorts.

  3. Anonymous

    And by the way, Social Security COLA was denied in 2009 also, but a one time $250 payment was made. That amount may have equated to a 3% raise for 2009, but not for the remainder of the Social Security recipients life, as a 3% COLA adjustment would have. So the government will realize the same massive windfall from denied COLA’s for 2010, 2011, and 2009 (less the onetime $250 payment in 2009). This savings alone will offset a large part of the massive debt buildup required to clean up the Bush era insanity. Again, someone needs to give a big thank you to America’s Social Security recipients for their generosity in helping resolve Americas massive debt crisis.

  4. Anonymous

    If you are a retired Social Security recipient, you did not receive a COLA adjustment in 2010 or 2011. This obviously created the funds to supplement wage earners “payroll tax holiday”. How about a big thank you to the retired Moms and Dads for that sacrafice, because that tax break didn’t cost the government a dime. Project the benefit of those two years of zero COLA at a rate of 3.5% a year times 55 million recipients times the remaining years of their lives, and the government has secured what could be billions if not trillions into the Social Security Trust Fund (or where ever else they would like to use it).

  5. Anonymous

    Just notice, they are taking out $32.92 more out of my fed tax this year then last….this started in Feb…what is up with this…this is off my pension check of $504.00…

  6. Anonymous

    I received a notice in the mail stating “Changes to the tax tables for 2011 may have altered the amount being withheld for federal income tax.” What was the reason for the change to the tax tables?

    The amount of my pension decreased by $65/mo.

  7. Anonymous

    I can’t believe that I only make $12.33 an hour and I am bringing home ~$200 less that I was every two weeks……….I BARELY MADE IT BEFORE………I went to Payroll and said, “what the heck”? Then as we went thru it I saw the increase…..$25,646 a year and I am paying $178.17 every two weeks in fed. witholding, SS, and Medicare taxes, THEN another $35 for insurance..=$213.00 every two weeks..the government is CREATING MORE POVERTY. I just got an $.18 an hour raise that is included in these figures….didn’t make any difference the government takes it…….. This is CRAZY. Try LIVING on $1586 a month, single, NO CC debt….buy groceries, pay rent, car insurance, gas…only the basics…AND yes, I DO know that I am luckier than some………more poverty….crap rolls down hill and as soon as the government realizes that although unemployment is ‘down’ for the month, but there are still millions out there who have run out of benefits and are still not working….the crap will hit the fan. Where do they get off manipulating numbers? Those people COUNT… I truly believe we are headed for a recession/depression….”If you aren’t outraged, you aren’t paying attention.”

  8. Anonymous

    Just read an article in our local paper that said all of our “extra spending money” was now going into the gas tanks. Well, I have news for them….there was no extra spending money for us any way. With the MWP tax gone and our fed. taxes back to old rates, the tiny 2% off of my soc. security deduction was gone and then some. My job has dwindled to 20 some hours a week, my husband is disabled due to a stroke and has seen no increase in his soc. sec. check and even if you do it is only 10 or 12 dollars. In order to have the $1000 to $2000 a year savings our president said that MOST Americans would recieve from the 2% decrease in soc. sec. tax, you also have to MAKE $1000 to $2000 A WEEK to see that kind of savings. Obviously, he wasn’t talking about people who live where I do. No one in the government has a clue how the average and below average person lives. They truly believe their own fantasy world that we are all going to have a $1000 plus to spend this year and no, I do not remember hearing them ever say that oh, by the way ,your fed. taxes will go up to cancel it all out any how this year. I am 10 years from retirement age for full soc. sec. benefits… there are no jobs here so I stay where I am in order to have some job. I don’t dare get sick because I have no health insurance and can’t afford any. I think they should all be made to live this life foe a while in order to qualify for running for any office, Republican or Democrat.

  9. Anonymous

    Well, those of us on fixed incomes (pensions) actually lose when SS kicks in because they lower your pension to compensate for the fact that you can finally get SS that you paid in to for years. Now, taxes continue to increase, government talks about “going green on energy” which is costing and will continue to cost and the gas at the pump goes up and up and up. But us, we drill in Brazil. Why help our people…let’s help another country. Makes sense, right…wrong. Let’s begin to help our own at home first. Stop blowing smoke and begin to tell us the truth.

  10. Anonymous

    I still don’t understand, I pay into PERA so I don’t pay social security tax. My Fed. tax rate went up and I am now taking home less, in this economy it is huge since I only now get home with $1,250.00. Does the Bush cuts not effect me?

  11. Anonymous

    Everyone, The tax rates are the same for most taxpayers in 2011, with slight favorable adjustments in the tax brackets and Standard Deduction. As a retiree on Social Security (SS), I did not receive reduced witholding in 2009 or 2010 because of the Making Work Pay Credit. I like others on SS received a one time payment of $250 in 2009. The increased $50/ mo witholding for 2011 is either a mistake by the Obama Adm. in applying the increase to those who did not benefit from the decrease, or, it is purposeful trick. The solution is to file a revised W4 to adjust your SS witholding back to what is has been.

  12. Anonymous

    We need a tax system that doesn’t favor certain income brackets and doesn’t create loop holes. Every person that makes a dollar should pay the same amount per dollar regardless. No itemized-deductible-make work pay-child credit-earned income bull#@!. Something that is fair to everyone. ALL americans,including our representitives and leaders,should be under the same set of rules.

  13. Anonymous

    I may need to diet but why is the goverment taking away my ability to buy food, medicine and pay my bills. Why doesn’t the goverment just give us a pill and let us go on out. Then they can have all of the money we worked 40 years to get. Screwed! HELL YES.
    Thank you to all the the goverment officials. Not one of you is without blame. I bet your Mothers do not tell their friends where you work becaue all of their friends are retired also.

  14. Anonymous

    I rec’d my pension check today and was shocked. I didn’t know why they took $42 extra federal taxes out. The state remained the same. I get single annuity for the rest of my life, so my gross distribution will never change. I work part time at H&R Block and a few credits will be disappearing on our 2011 returns. We received making work pay in 2009 and 2010, but will not in 2011. Also, the child tax credit will go from $1000 to $500. What a bite …

  15. Anonymous

    Everyone should quite complaining! If it wasn’t for the Republican’s using the excess income from Social Security (over $2.5 trillion since 1983)and borrowing another $10 trillion we would not have been able to allow Wall Street hedge fund managers to pay taxes at a 15% marginal tax rate, we would not been able to have our Wall Street financial wizards to make billions selling stale mortgages, and we would have had in place regulatory rules that would have prevented other financial genius�s from pulling down billions while placing the bill squarely on the backs of the American taxpayer. Just think where we would be today if the wealthiest Americans had to pay their fair share of taxes and the country’s financial industry was force to play by the same rules the rest of us have to play by. The Republican�s have favored the few who are better and smarter than the rest of us so we could all be lifted up from the wealth that those much smarter than us create. Don�t worry some of that wealth will eventually trickle down to the rest of us.

  16. Anonymous

    When the 1st year of this credit took place, I increased My federal withholding $20 to compenstate for some of the possibility of not having enough took out since I also work a part time job, I was advised this by a tax specialist. Yes, I did benifit from the Making Work Credit when filing. With the break going away for when I file next year, I simply let the + $20.00 continue on, because taxes always go up anyway, & I have no dependants, & on My $25,000 a year – I’m in a higher tax bracket. Near 25% of My total income, is taxes. Yes, it’s kinda unfair to be in a lower income, working 625 more hours a year over the regular 2,080 to make that $25,000 & having higher taxes – it is what it is & don’t think it’s ever going to change. There can be a price on lower incomes, it just depends on what Your filing situation is.

  17. Anonymous

    @Ken ODell — you are absolutely correct. Many people contribute but do not receive. Your father is a prime example. This happens a lot to Men and African Americans because of their shorter life spans.

    Soc Sec is a Ponzi Scheme that’s about to go bankrupt. Some people collect waaaay more than they put in. A prime example is Ida May Fuller — the first person to receive a Soc Sec check. In 1937, 1938 and 1939 she paid a total of $24.75 into the Soc Sec System. Her first check was for $22.54. After her second check, she had already received more than she contributed over the three-year period. She lived to be 100 and collected a total of $22,888.92.

    Soc Sec is so unfair. Some people (like your father) get nothing despite years of contributions. (Your mother got something, but it sounds like it was a pittance compared to his contributions.) Others (like Ida May Fuller) hit the jackpot — more than 900 times what they put in.

  18. Anonymous

    Jimmy H…..You hit the nail on the head and until we get back to producing more than we consume we’re going to have big problems! Our government has become an out of control spending monster. Like an elephant in a vegetable garden.

  19. Anonymous

    @cm: I didn’t feel you were making light of my situation. I interpreted your comment as a question: “no increase ever?” Thus, I felt I needed to clarify. I did not intend to shout at you. My use of caps meant only to answer your question and express my frustration with the unfairness and sneakiness of our politicians taking out more taxes from retirees. It also expresses my frustration of becoming distrustful of our politicians with their current talks of reducing the deficit by reducing our Social Security. All of this is not making this lady a happy camper. No offense was not meant toward you, cm. Offense is directed at the politiicans regarding this issue.

  20. Anonymous

    @Carol — that’s why I said “That’s terrible” in my post — because I am empathizing with your situation. I have absolutely no idea why you feel I was making light of your situation. I have no idea why you feel it’s necessary to SCREAM at me in ALL CAPITALS! And then repost what you said before.

    In hindsight, I do feel that some of the comments in my first post were a bit unconstructive. That’s why I tried to make up for it in the second post and take on a more positive tone. That’s why I retracted some of my comments in the second post. That’s why I clarified my comments where people felt that I thought I was already entitled to SS.

    Obviously I missed the mark — because your hostile tone in response to my second post clearly set you off.

  21. Anonymous

    I just filed 2010 taxes and noted that the Making Work Pay credit IS claimed when you file your taxes. This is contrary to the explanation we were previously given which stated as follows:
    “For starters, the Making Work Pay tax credit has expired. Unlike most income tax credits, which can be claimed when you file your taxes, the Making Work Pay credit was given out incrementally via reduced federal income tax withholding during 2010.”
    This being the case, it does not make sense to take more out via federal income tax withholding for 2011.

  22. Anonymous


  23. Anonymous

    @Robert: See my comment to cm above. Also, The “Bush Tax Cuts” has nothing to do with the increase in our Federal Income Taxes. The Bush Tax Cuts are primarily for the upper income folks. The Federal Income Tax increase to us lowly tax payers is because the “Making Work Pay Tax Credit” was allowed to expire in December 2010. All in all we are talking about 3 different things that contributed to changes in our taxes.
    (1) Bush Tax Cuts Continue for higher income folks
    (2) Making Work Pay Tax Credit Expiring for all
    (3) The 2% Decrease in FICA witholding for the currently employed but this decrease does not help retirees.

  24. Anonymous

    @cm: NO INCREASE ON OUR PENSIONS EVER! I repeat: “cm: Our company pensions are FIXED!!! There is NO provision for inflation on our company pensions EVER!! When we have to pay additional Federal taxes on our company pensions, we are left with less to live on!! Our Social Security income is much less than our FIXED company pensions AND SS has not been increased for the last two years. Even when SS has been SLIGHTLY increased for inflation, most of the increase was taken away to pay the every increasing MANDATORY monthly MEDICARE payments.”

    The continuation of the Bush Tax cuts PRIMARILY helps upper income people, period!! The now lowering of the FICA withholding tax by 2% on current workers offsets their increase in Federal Income tax that is due to letting the Making Work Pay Tax Credit expire. Letting the “Making Work Pay Credit” expire increases Federal Income Tax for all but PRIMARILY hurts us lower income tax payers that are retired and because we are retired we no longer pay into FICA and thus do not get the benefit of the FICA 2% decrease that current workers get that offsets their increase in Federal taxes due to the elimination of the Making Work Pay Tax Credit for all. The end result is retirees are seeing an increase in Federal Taxes being taken out of their FIXED pensions; thus, we are getting shafted!

  25. Anonymous


    1) You’re right — we do get 99 weeks unemployment. I retract that part. Also, didn’t want you to think I am minimizing the fact that some retirees have trouble making ends meet. However, many of the comments in this thread make it sound like they are the *only* ones who have financial problems. That’s the part that I find over the top.

    2) Do not want to give the impression that I was not doing anything about my current situation. A few years ago, I had planned on retiring from here. Unfortunately, this extended recession has changed all that. My situation has a couple of challenges:
    * My age (1 1/2 years away from 50)
    * The need to upgrade my skills to make myself more marketable — currently taking classes but with a full time job it’s going to take a while.
    * Outsourcing

    3) And yes, I’m not getting SS because I haven’t been contributing for 40 years. It was not my intention to make it look like I thought I deserved this. (Mea culpa if my post was a little bit unclear about that.)

    However, I have been contributing since 16 (more than 30 years already). Currently, people my age can start collect at 67, but must wait until 72 to get full benefits. That’s a total of 56 years for me. And the problem is that SS is going to be bankrupt soon. I will have been contributing about 40-45 years and they’re going to say to me, “Sorry, we don’t have any money for you.” That’s the part that’s not fair.

  26. Anonymous

    I’m very confused. People were complaining about the Bush Tax Cuts and now they are complaining because the tax cut is now gone.

    @Carol — sorry to hear about the pension situation. No increase ever? That’s terrible. Part of the problem is that the government rapes private companies. This is one of the reasons I’ve considered going to work for the feds. Like last winter with all the snow — nice 4 1/2 days off *with pay* — private companies cant afford that luxury. But they can — just keep sticking it to private businesses.

  27. Anonymous

    Taxes have become confusing and full of loop holes. The average person has a hell of a time trying to figure out all of this tax stuff . When are we going to get a simple tax program ( a flat tax etc.)that will make life simple! We shouldn’t have to dread tax time every year wondering whats changed and how much to pay.

  28. Anonymous

    I still don’t get it. Congress passed the so called “BUSH” tax cuts in late December. What does taking out more income tax beginning in March have to do with “keeping the rates the same”. How does a “cut” increase the taxes?

  29. Anonymous

    thanks for all the comments. thought i was seeing things. penion showed increase of $16 but total deposit $29 decrease. state tax increase 58 cents. the problem was with the $35 federal tax increase. thats $29 decease each month. i was told ,the federal tax table increased.
    the solution as i see would be to not have any state or federal withheld from the penion. then not pay H&R block $150 to do the simple and short income tax, i am old, forgotten and off the radar. hopefully they’ll still deposit my check. thanks for sharing!

  30. Anonymous

    Hey Pete,
    Read your own reply. You DID benefit from the “MAKING WORK PAY” tax break so what’s your problem. Now that’s it’s ended your complaining about the deficet created by Republican greed and stupidity? I agree with you.

    147 Pete Says:
    February 7th, 2011 at 6:03 pm
    Norman L. Wiechnick, unemployment is at 9.0%, the deficet is 1.5 Trillion. How did I benefit from Working Work Pay when I am now paying $50.00 more in Federal Withholding Tax.

  31. Anonymous

    Just received an e-mail from one of my senators regarding this increase in Federal Taxes. He said that because the Making Work Pay credit expired on Jan. 1, 2011 and was replaced by a 2% cut on FICA taxes, some people will see an increase on the Federal withholding taxes. People who are retired get the shaft and the only thing we can do is remember this when election day comes.

  32. Anonymous

    Both my husband and I are retired and each receive a pension and hubby received SS. Each of our pensions were reduced by over $30 and our health insurance went up over $30 a month. This came to a total decrease in income of $100 a month or $1200 a year. Hubby’s pension is fixed so he will never get a COLA and since I’m a federal retiree we have not gotten a raise in pension or SS in 2 years. The loss of $100 a month when everything else is going up amounts to quite a chunk of change. Where will this end????? Any COLA we get just goes to pay for the increases in health insurance. Our country is in big trouble and although I don’t know the answers to fix it, this doesn’t seem like the way. Everything we buy cannot continue to go up while our incomes continue to decrease. Who will help the senior citizens when they can’t pay their bills or put food on the table?????

  33. Anonymous

    cm: Our company pensions are FIXED!!! There is NO provision for inflation on our company pensions EVER!! When we have to pay additional Federal taxes on our company pensions, we are left with less to live on!! Our Social Security income is much less than our FIXED company pensions AND SS has not been increased for the last two years. Even when SS has been SLIGHTLY increased for inflation, most of the increase was taken away to pay the every increasing MANDATORY monthly MEDICARE payments.

  34. Anonymous

    Norman L. Wiechnick, unemployment is at 9.0%, the deficet is 1.5 Trillion. How did I benefit from “Working Work Pay” when I am now paying $50.00 more in Federal Withholding Tax.

  35. Anonymous

    cm. You don’t have social security because you have not contributed to social security for over 40 years like I have, you can collect unemployment for at least 99 weeks if you lose your job,if you are unhappy with the amount of pay you are receiving you can always look for another job, I am 67 years old I would have a hard time finding a job at this age. I think when your retire your thinking will change because you will see what living on a fixed income is really like. Ask your Mom and Pop if you don’t believe me, if they are deceased ask any older person what it is like living on a fixed income.

  36. Anonymous

    All this griping (including my own) could have been avoided simply by explaining that the tax break for “MAKING WORK PAY” is expiring. Why the Obama administration is being so secretive about all the good that has been accomplished, the end of this temporary benefit included, is beyond me.
    Hey you “REPUBS” out there, quit your political garbage slinging, you benefited from this also.

  37. Anonymous

    There’s a lot of griping here from retirees. It’s not just the retirees that are going through tough times.

    You guys have not had cost of living adjustments increases the last two years because there has not been inflation. Well, our company has been really hit hard by the economy and for 2005, 2006, 2007 and 2008 we did not get any pay increases. Then at the end of 2008 we had to take a cut in pay because of things. I’m making less than I did in 2004. I see the company financials so I know they aren’t doing this out of greed.

    I need to be grateful to have a job even though I am living on an income that was the same for several years and then went down.

    It’s not a “fixed” income, it’s a GUARANTEED income that INCREASES each year unless there’s no inflation. It would be nice to have SS – if I lose my job, my income becomes zero. And many people have a lot of trouble finding a job when they lose theirs.

  38. Anonymous

    Totally caught off guard!! Why no news re retirees being hit with an increase in Federal taxes?? Husband and I net pensions were reduced by over $79+ for the month of February and apparently this will be the case each month in the future!! This translates to over $951 less spending income per year for us. There was no advanced notice that this was going to happen!! In fact, lots of hoopla was made regarding continuing the Bush tax cuts!! No mention about the Making Work Pay Tax Credit expiring!! We retirees no longer paying into Social Security do not benefit with the decrease in FICA tax reductions. Only current workers do. Apparently, the expired Making Work Pay tax credit in some way is why we are seeing a Federal income tax increase. This is not fair for the elderly and retirees on a FIXED income; especially, with food, heating, and gas prices increasing!! This appears to confirm the growing resentment towards retirees who played by the rules by doing without extras during our working years to plan for our retirements; i.e., work pensions and social security pensions to then be penalized by increasing our Federal taxes on our pensions while many others (the rich) Federal taxes are reduced. Where is AARP when you need them??

  39. Anonymous

    when you are retired and living on a pension and social securiy,every penny counts..i voted for obama, but i am very upset..maybe that extra tax deduction of 25-30 dollars on the pension check doesnt matter to him or the cronies in congress, but for me its grocery money or paying my electric bill..i worked hard for that pension, and to see breaks given to those making considerably more is upsetting..please post that website again where you can check on what happened..thanks

  40. Anonymous

    This February the taxes on my pension went up $53 more a month and my health insurance went up $12 more a month. I won’t be voting for democrats or republicans ever again.

  41. Anonymous

    I made 30,000 last year. $400 (Making Work Pay?) divided amongst 26 paychecks would come to $15 something per paycheck. Even if they took this back, they are now taking out approx. $22 more in FIT, not $15. My hourly wage hasn’t changed since Sept, so I’m not getting this.

  42. Anonymous

    Democrates or republicans, it make no difference.
    Those in washington are the smart ones and we little people are the stupid ones. Most all complaints have been about withholdings from your pay. I believe during FDR’s administration was when payroll deductions
    were started. Prior to that, when taxes were due, you
    paid them out of your pocket. Can you imagine what
    that would would be like today when your due burden
    could be 8 to 10 thousand dollars? A lot of people
    would end in prison for failure to pay, or taxes would
    never gotten out of hand as they are today. Us stupid people usually just accept what we get to take home.
    And, sorry, to you union people out there, the same is
    true. Our union got voted out because our company
    refused to withold dues from the employee’s checks. When they had to ante up for dues and could actually see that they were not getting their money’s worth, the
    union got nixed. And also, for 2011 your tax rate did not go up, but your tax burden will increase the $400
    single or $800 joint that you were given the last two
    years. So, I wouldn’t change my deductions. This is
    at least true for earned income. Also, do not knock
    the rich as us little people would not have jobs without them. They, too, should have to pay reasonable
    taxes, but cannot be the sole supporters of the terrible spending in Washington

  43. Anonymous

    For all of you that are blaming the OA, here it is in plain english. Bush got into the war way over his head and refused to back down or take blame for things that were not right. So Bush gives you a couple tax breaks. YAY! We’re all happy. Meanwhile the government cant opperate on this kind of funds cut. Global markets see it. Economy crashes. Obama Admin. steps in and takes those bennifits away so that they can dig us out of this hole we’re in and start bringin the US’s nose out of where it doesnt belong. Now that your getting your sucker taken away your all pissy….cry a little more.

  44. Anonymous

    I am also a retired federal employee, went out on a disability, I have a small part time job and cannot believe the federal witholding on both my retirement and my very small check I get from working part time, I am not an Obama supporter nor will I ever be.

  45. Anonymous

    I just called TRS of IL. The reason given for the decrease is INCREASED TAXES. I,too, thought the Tax cuts had been extended. If this is true, WHY is the cut going into effect anyway? Couldn’t possibly be our Government led by the Great Obama, now could it?? He was just on the news and so concerned about his daughter’s dance???? Is this why we elected this goofball??? If we don’t vote him out, along with the rest of the D C Democrats, our country is in BIG trouble.

  46. Anonymous

    I suppose all of you Dems out there had nothing to do with the increase in health insurance either, did you? How about having to pay a 25% increase or $2,000 more per year to fund Obamacare, which is totally unconstitutional? Wake up Dems, maybe the Brotherhood will take over the USA since Obama sympathizes with Egypt’s protestors so much, he i may be getting just what he deserves.

  47. Anonymous

    Hi everyone, i posted this to my friends on face book on February 1, 2011 out of hurt and anger: there is a horrific thing going on..It seems that our last President Bush, allowed a great decrease in the tax bracket of the rich, which our President Obama had to continue because the Republicans would not accept anything else…..So the decrease to 39% Bush started for the rich stay s in place. President Obama had to compromise to keep peace with the Republicans. The rich Republicans said they will give to their favorite charity if Bush s farce is allowed to continue..Robertson my belief is the rich Democrats feel the same. if i may be so bold as to say all rich people are partaking of this this this oooooooo am to angry…

    Now here is the catch 22…In order for the economy to stay some what afloat…Guess who is footing the bill…

    This morning i started the process of paying my monthly rent, to my surprise my monthly income had decreased. So say i to one self Hmmmmmm why is this…After researching all, found out that people as myself are footing the bill… For out of my pension check that i worked too hard to mention for and took mental abuse to the point of it some what becoming physical if you understand that…To say one was astounded is a far cry from my actual belief..that here i am little ole me receiving my pension check with 33 dollars less money.. Why because the federal government has increased their deduction.

    12 x 33 = approximately 396 to 400 dollars a year. which if all those working and receiving a pension for retirement as my self…That is a lot of green..Sad thing is it will not help the budget in any form fashion nor way, for if we receive less money we spend less money business s will go out of business, people will be laid off, and unemployment will run out are you seeing the picture i am?????

    Now here is the kicker, what is our Governor going to do about state tax…Knowing now what the Federal government has done…All the years of my blood sweat and tears working once again to be treated like a second class citizen well there are no words in any language to express what one really has to say…

    The rich are probably laughing this week, as all of us small potato s are receiving less on are pay check s and they are paying less tax and receiving more on theirs…..Scam sham disgrace…..anger…just can not believe what is going on, some say it shall become worse..Am praying is all……;o) njg<

    Now after reading all the posts above am hopeful an error and a mistake was made…Prayerfully any who how….;o) njg<

  48. Anonymous

    It’s a shame that a person works 30-40 years to have a retirement check and then get it screwed around with so the rich can get richer. We all see our paychecks decreasing but I doubt very seriously if the politicians have to worry about their paychecks decreasing. No wonder people sit around on their butt and collect unemployment checks, doesn’t seem to matter if you work all your life or not, you still get screwed by the government and moving out of the country seems to be our best choice. Or we can pray that God will come and take us all home where we don’t have to worry about paychecks!!!!

  49. Anonymous

    I feel like I am being penalized for sticking with a company 39 years and being able to retire on service……just to have the rug pulled out from under me. It’s a shame we have to notice our checks are less and then have to scrounge around to find out why!!

  50. Anonymous

    i am an annuitant and we have not had a cost of living raise in two years.it is a shame that our federal and state taxes were increased.Our president must have something to do with not stopping this.what is our country coming to.they are trying to balance the buget on the backs of the poor folks. obama need to do something about this and quick.he is talking out of two sides of his mouth. more folks are going to lose their homes. my retirment check was decreased by $59.00 with the health insurance increase.obama extended the bush tax cuts for everyone but our taxes were still raised.I am begging obama to do something or we have no choice but to vote him out.if he is not responsible he need to tell the people who and what is responsible.if he is not responsible he need to say so or he will be voted out in 2012. if the republicans are responsible please let the people know.the democrates lost the midterm election because they don’t defend themselves.we need a cola increase.

  51. Anonymous

    My pension bank account deposit was also down $48. I sent an email to my taxpreparer as to why?No answer yet.I began to goggle this issue and came to this blog.Thanks for all the info. It doesn’t seem a tax program error, it seems like the work for pay tax credit expired and we need to pay the Government back.That’s areal good deal?

  52. Anonymous

    Better way to get back is to have $o fed wh tax and file qtrly estimates; this way they get there money
    Qtrly not monthly even though its the same; You are in control and it screws up their CASH Flow; better yet make sure you dont get a refund; theu have YOUR money for along time NO INTEREST is paid makes ME happy!

  53. Anonymous

    amen, jmellis! I, too, am retired. I got the income tax REDUCTION last year and the reinstatement of it this year. Net Zero. Do your homework people before you start spouting your GOP crap!

  54. Anonymous

    You people who blame Obama and democrats for your increase in income tax witholding don’t know what you are talking about. It was Obama who got you the Making Work Pay tax reduction to begin with. It was always set to expire at the end of 2010. It was part of the AARA stimulus money that Repugnacans were/are against. It isn’t the Democrats fault that most of you didn’t even realize that you got a tax reduction. You are too busy listening to FOX news and the GOP lies.

  55. Anonymous

    I have previously commented on this blatant disregard for the middle and lower class individuals, especially retirees. A TIP, if you are a veteran and served at least 1 day during war time, you might be able to claim a non service connected disability through the VA. Give it a shot, I know people who are receiving a pension based on this. Just google it and read. Think about PTSD if you served in Viet Nam.

  56. Anonymous

    Oh geez! Derrell, it’s dumkoph comments like yours that cause innocent people to be seriously wounded, or worse yet, killed! Read that: TUCSON, AZ a few weeks ago!

  57. Anonymous

    What we as voters need to do is demand truth in all statements these two faced lying politicians say! You need to get off your soap box and demand the change we were promised, or vote the SOB out. We to do what the egyptians are doing and use our right to protest for change. Hey the republicans only care about the rich not the working class.

  58. Anonymous

    Retirees don’t pay Social Security, they’ve lost money because of the expiration of the work for pay tax credit of $400 single, $800 couple. For most working people, the expiration of the tax break is made up by the cut in the Social Security withholding tax.

  59. Anonymous

    More lying, bullshit, double-talk from the Obama abomination. I am a retired teacher, my wife works part-time, about 12 hours per week. She is making $2.00 (TWO DOLLARS) more a week, and my monthly pension check just got REDUCED by $53.00 a month. Even with the Bush tax cuts re-installed and Social Security tax being reduced by 2%.
    Bruce C. is right, the retired middle class got screwed again by Obama and the stinking Democrats. G

  60. Anonymous

    Oh we don’t need to take back our negative comments there is enough tings screwed up that warrent negative comments. And I am not going to “tone down” my exercise in free speech!

  61. Anonymous

    Our Health Insurance went up $127. per month and were shocked to see the Fed. Tax went up $47.50 per month. Our monthly income is now what it was in 2002! The only way we can fix this is vote these people out of office, if we can survive that long. Back to the Health Ins.– we were paying $396.00 per month and it went to $527.00 I am just sick and angry about the shape our country is in.

  62. Anonymous

    Bill-I read the article and not sure if it is why our rates changed. There is no mention of the ‘making work pay’ credit that apparently did not get extended with the Bush tax cuts. Since no information was provided with our stubs in January, this has caused a lot of confusion. I guess we’ll have to wait and see on our Feb. check. I called my pension system office and they said this happened because of tax law changes and gave no indication that they had to re-program these changes, which by now they should be informing their retiree’s, especially if they are getting phone calls about the situation.

  63. Anonymous

    My pension chk was fine in Jan, it’s this month’s chk that decreased by $41 due to a FEDERAL tax increase, which I’m told is due to a change in the tax tables (or something like that). Anyway, was told it will continue. If things keep up like they are going, we’ll be eating dog food in three years.

  64. Anonymous

    I’m also a fed retiree, but live in Argentina now. Much cheaper and much more fun. The good times are over up north. The party that has been going on for most of our lives has come to an end and now is time for the hangover to begin. Everything will become more expensive up there and you will see your incomes reduced more and more by taxes. Down here I live well on half of my pension so the increase in withholding was not an issue. I saw the mess up north coming years ago and decided it was time to move on. Those of you who can, I would advise you to do the same. And Good Luck!!

  65. Anonymous


  66. Anonymous

    Retirees got screwed again, thanks so much Obama administration. Can’t trust a thing they say. Retirees don’t get the Social Security difference. Where’s the “helping out the middle class retirees” part that you hear coming out of his mouth every speech. Voters need to get together and vote the current Obama administration out!

  67. Anonymous

    I just received my retirement check and it’s $32.00 less then last month. That’s $384.00 per year!!! My Social Security hasn’t increased in 2 years.
    What creditor do I tell that I can’t pay their bill? I guess it will come out of our food budget AGAIN this year. Thanks Obama, hope you enjoyed your Haiwian vacation.

  68. Anonymous

    No matter what caused this, and that it will all work out in the end when you file your taxes…there should have been better communication about the withholding going up. Most people live from month to month that are retired and yes, they can fix it by changing their allowances but what a shock without being told what is happening!!! Most people can’t keep up with the tax laws and system changes because its so complicated and convoluted. And we were told the Bush tax cuts were extended, and I don’t recall hearing anything about the ‘make work pay, ending. But then, look at all the behind closed doors decisions being made the past 2 years…and we find out later. Yes, this causes distrust!! And if “Obamacare’ actually survives, just wait and see what else happens to our taxes!!!!!

  69. Anonymous

    I am retired and my check also decreased by $50. My wife still works and according to Mr. Obama we should have plenty to spend since the wonderful Federal govt. cut the social security taxes for this year. Well after her fed withholding went up not much of an increase. I think Obama should get on Tv and explain how this is helping. I, like millions more, am looking forward to the next election. We can get rid of all the rest of the Washington trash.

  70. Anonymous

    I just got my retirement check and the fed tax went from $16 to over $64 this is a 300% increase. Must be an error. When called my retirement service center was told of a new tax table. Still 300% would be at least on the new if not a revolt.

  71. Anonymous

    If this indeed all comes out in the wash next year, why didn’t anyone explain this was going to happen this year? I was stunned. Communication is a good thing. Lack of communication is not. It causes confusion and distrust.

  72. Anonymous

    I really just feel beat up. I can’t juggle and figure it all out anymore. No matter how hard I try, I keep thinking it has got to get better, well maybe a little better and it doesn’t. Does anyone in goverment land know that we are slipping away. Our grocery bill is getting larger by the second. ALL UTILITES, have gone up. Home & Car Insurance up. Property taxes, up. Cable TV up. Gasoline…YUK YUK YUK. WAY UP. Health Insurance-yup you guessed it up again this year. No help inflation? What an insult to hard working, I pay my own way Americans. VOTE? Vote for what THIS SH!t?

  73. Anonymous

    I’ve read all of your comments and noticed that almost all of them were from retirees. I’m a 62 year old Physical Education teacher in a Catholic School in Ohio, where I’ve been employed for 29 years. My income is at “poverty level,” and I struggle everyday..just to “survive.” I haven’t had health insurance for 19 years. I don’t seek medical treatment, unless I’m on “death’s doorstep,” since there would be NO MONEY to pay this bill. I REFUSE to go into debt, so I only occasionally use a credit card. I account DAILY for EACH & EVERY DOLLAR that I spend!! You can imagine my surprise when I saw that my Federal Taxes “DOUBLED!!” I had no idea this was happening. When I saw Congress extended the tax cuts, I “ASSUMED” that everything would stay the same. Sooooo, why did they NOT inform people about this, so we could not be so SHOCKED. It’s not just the retirees, it’s the “WORKING POOR,” like myself that has been affected. That extra $35 a pay ..that I won’t have, will really HURT me!! THANKS CONGRESS & OBAMA, or WHOEVER did this to us…not!!

  74. Anonymous

    My wife and I are receiving a Railroad Retirement annuity. We received a letter today stating her withholding tax would increase $32.00 a month and mine will be increased by $50.00, a yearly increase of $984.00. Sure enough I just checked my bank account and our direct deposit for our pensions are $82.00 less than we normally receive. This was a total surprise and I have just e-mailed both our senators and representative to find out what is happening and why this was kept such a secret!

  75. Anonymous

    Ed: Per my earlier comment (7:26pm), I looked at the IRS tax (not withholding) brackets or tables for 2010 and 2011 and saw that they are the same except for adjustments for inflation. Check for yourself or call the IRS to make sure. Of course, tax credits also impact this, and the Making Work Pay credit has expired. Not sure what else changed (for example, I thought I saw you can no longer increase your standard deduction for real estate taxes). What surprised me in all of this is when I looked back at the withholding tables for 2010. Right at the back of it, as I mentioned, is a section for adding back in extra withholding for pension income, as it didn’t qualify for the Making Work Pay credit. It looks like no one commenting here had this automatically adjusted by their pension administrator. Again, adjusting ones withholding can leave things the same for this year if so desired. I’m afraid that people with only pensions are going to get upset when they do this years taxes as they will be under-withheld.

  76. Anonymous

    Hi there, it sounds like most of you are retirees. Well Im an employer and I can tell you that you are not the only ones angry about this. We have done 3 payrolls this year and our paroll taxes Fed and State combined have gone up $6,200.00 to $8,900.00 per PAYROLL!. We are a manufacturing company in California our hours worked varies with orders but we can still do the math and tell you all that everybody got screwed not just the retirees and low incomes. Most of our workers are skilled craftsmen and have salaries rangeing from $17.00/hr – $56.00 also we pay 80% of their health insurance. Wait till we have to add that to their W2’s. You all take care and keep up the fight….

  77. Anonymous

    Today is the one year anniversary of my wife’s federal retirement. Tonight is the electronic deposit of her twelfth, monthly stipend. Because of the increase in withholdings, this will be her smallest check of the whole lot. I have the health insurance taken out of my pension so her net loss is due to income tax, only. Sorry, Honey… I didn’t see it coming! This is gonna leave a bitter taste…

  78. Anonymous

    Is there some sorta verification that only the withholdings went up yet the taxes didn’t? I’d hate to reduce the withholdings then get an unpleasant surprise next year!

  79. Anonymous

    Really, we are going to throw out the RICH thing again. If you will take the time to understand you will put the blame where it belongs, the folks that told you “NO TAX INCREASES FOR THE LITTLE GUY” Keep beliving the likes of Obama, Biden and Pelosi and you will see your entire Federal check go away because the Federal Govt. will be broke like California. The problem is not with the likes of Rush paying too little its the many useless Americans that never contribute to their own well beign or that of their Country.

  80. Anonymous


    Yes, this makes sense to me. Next tax year we will owe less or get a larger refund because more is being withheld now. We could change the withholding amount if we want to. Thanks for the clarification, I can wrap my brain around this now.

  81. Anonymous

    I just saw this and got upset at first, especially since I just got my pension check net decrease. However, after thinking about this, I believe this is a non issue, although you will need to adjust withholding. There is a big difference between withholding amount and taxes owed. If all you have is pension income and no earned income (e.g. wages), then you didn’t get a Making Work Pay tax credit. Because you had less withheld last year in anticipation of the credit (built into the withholding tables – there was a separate pension adjustment in the tables of an extra $50 or so a month, but my company didn’t use it and it sounds like yours didn’t either), you will owe more or get a smaller refund when you do your taxes. This year, there is no more credit, so the withholding tables reflect that. You will owe less or get a larger refund next year. However, since cash flow is very important to us all, you should file another W-4P, withholding certificate for pension or annuity amounts. If you have specified additional withholding, like we have, reduce it correspondingly. If not, add more allowances to reduce the amount withheld per the instructions. Regardless, it should come out the same in the end. Hope this makes sense. Please feel free to poke holes in this if I am off base.

  82. Anonymous

    I am a federal retiree. My income taxes went up 85$ and my insurance went up 45$ so that is a total of $130.00 less each month on my retirement check. This government knows how to play dirty and increase your taxes even though the tax bill was defeated. I am ashame to say I work for this government. I worked 30 yrs for the federal govnment and they treat us like this. sad sad sad..God sees all of this…yes he does.

  83. Anonymous

    WTF?????? I’m on a fixed pension also. Guess I’ll just add some dependants and the feds can wait for their money while I use it all year. Everybody should do the same. What other recourse do we have.

  84. Anonymous

    I wonder how many folks are in the same boat as us. My wife and I are both federal retirees and each had our withholdings increase by $47 per month. Prior to the extension of the Bush tax cuts, we planned to increase our monthly Thrift Savings Plan (TSP) withdraws to compensate for any tax hike. When the tax cuts were extended we figured we didn’t need to do this so naturally we missed the Dec 15th deadline for TSP withdraw increase for 2011. We’ll survive but we’ll need to tighten our budget for this year. How is that good for the economy? Maybe TSP should expand their open season this year for changing monthly withdrawals.

  85. Anonymous

    I don’t know for certain if there is a particular political party behind this mess-up or not, but each person writing here should contact their rep or even senator, no matter which party and politely let them know you aren’t a happy camper with this unfair jolt. Granted, your letter will most likely never reach their eyes but you at least you did your part in a representative system. Who knows? We might get lucky!

  86. Anonymous

    What a shock. My husband retired from the Fed.government 14 years ago. Just got our annuity adjustment for 2011 and our Health Ins. went up $127. amonth and Fed. Tax $47.50 a month. We are now getting the same amount we got per month in 2002. No cola, but gas, groceries, etc. have all gone up. I am angry!! We are at the mercy of OBAMA CARE and I’m fed up. The government has gotten too big and wants to run everything. We need to get all these people out of office!! All they do is lie.

  87. Anonymous

    Last year when a lot of folks got those little Make Work Pay “bonus” credits in our tax filings, no one said we would have to pay it back! If so, they shoulda just kept it. Yep, they hoodwinked us big time on this one. Considering the anti-tax climat in the country, it is hard to fathom that they thought we wouldn’t notice this. We should scream loud and often! A pensioner has enough on his/her budget plate without Uncle Sam sticking his sticky fingers into our wallets during tough times. Time to scream loud and often… To add insult to injury, when the tax cuts they blabbered about in December truly run out in another couple of years, we are going to be hurting, big time! How that helps the economy is beyond me… Better hunker down!

  88. Anonymous

    Someone please explain what happened here. Didn’t we just extend the Bush tax cuts and didn’t Obama say no tax increase for seniors and low and middle income earners? Looks like we got screwed again by our overspending government officials.

  89. Anonymous

    I also could not figure out why I received an increase in federal witholding on my pension check when the BUSH tax cuts were to be kept in place. I cannot loose one cent less. Obama and his Commie minions are a real joke. Wait until you see the cost of Government health care! Hopefully it will be repealed. Vote Obama out in 2012. He is whom he keeps company with. Now and in the past.

  90. Anonymous

    Wow! My wife and I are on federal pensions, too. Imagine our surprise when the taxes that didn’t go up actually, well…. Went up! Since SS benefits or withholdings aren’t part of our lives, you can imagine our surprise when our checks lost around $100 ground between the two of us. I am actually making less per month than I did in the two previous years. No matter what the reason is for the increase, it is still a tax HIKE! They blind-sided millions of people on this one… Thanx guys. I am hoping there is a collective scream of disgust and whoever pulled this switcheroo straightens it out, pronto! I definetely will not forget this event when the polls beckon. I am mad.

  91. Anonymous

    My pension check payment was $48 less that last month due to federal w/holding. The tax tables changed was the explanation by the provider.

    We all thought there was to be no change in taxes after the vote a few week ago, now we find we have been tricked again. With hold more now,use the taxpayers money for a year or more and make it look like the fed is got more money than they had counted on. What a shame, does congress and the internal revenue think we are that stupid.

  92. Anonymous

    I too retired from the federal Gov’t and my taxes went up by 49.58,I could not receive all of my social security when I paid into it over the years before Gov’t work, because of double dipping. After working all my life as a single parent, bringing up my three children and proud not go take welfare or food stamps this is the thanks. I own my own home and pay the state property taxes, that too that went up, they are certainly get their fair share of my sweat. I should have gone on welfare all those years, I would now have gov’t assistance for apartment,(no property tax) food stamps and free medical other then paying my medicare I probable could get free eye glasses and dental, which I do not get now.

    I think what we all should do is take our money and not pay any taxes and put it into a bank and then at least earn some interest, then pay them at the end of the year so they won’t use our money until then. Being retired who knows when we will die that would be a big laugh on them no taxes on us can’t collect from the dead………..

  93. Anonymous

    Our tax system is so complicated…it needs to be revamped. I too am retired and noticed a $30 decrease in take home pay. I payed SS taxes during my 30 years of state employment but not in retirement. So it is a $30 hit and it may not seem like a lot to some, it is to me!!! Everything is going up, food, gas, utilities, HEALTH ins.-its ridiculous. But this is what the elected officials both locally and federally have gotten us in to. (both republicans and democrats!!). They must think the general public is stupid. Something does need to be done to make our tax system simplified, and FAIR. Or one day, there will be revolt here on our streets in this country!

  94. Anonymous

    Retired auto worker, made the one major auto company that was bailed out, their millions to travel on private jets and put themselves in bankruptcy and now I lost 47.00 a month in Fed. What? Seems like you get kicked no matter what you do. That $180.00 a month was a car payment, guess I buy a moped now!
    Definately this is one for AARP to work on!

  95. Anonymous

    I was totally shocked. I too, thought what I heard on the news would not affect us retirees. No where did newscasters say, “Retirees, hold on to your hats, it will affect you too”!

  96. Anonymous

    The only way to fight this is through the AARP or some other organization that has the clout to scream bloody murder. This really PO’s me because like a lot of others posting here, we scaled back when I retired and every penny counts because utilities, gas, postage, and food all go up and we’re no longer getting COLA’s. Obama isn’t the culprit… its the Republicans who forced this deal down his throat. OTH, Obama promised no tax increases for seniors and middle income, and maybe the AARP can get involved with a petition or something that raises awareness. Senators and Representatives are making big bucks in salaries and perks and its pretty obvious that the Millionaires need their tax breaks more than those of us on a fixed income. I’m going to write to AARP and I suggest everyone else does. I will also see if there’s anything covering this on Newsvine.

  97. Anonymous

    We were under the impression that 2011 income tax rates would be unchanged from 2010, however, my husband and I saw our pension checks reduced by $50 each. A $100 cut per month is a lot of money. We were not expecting to pay higher taxes and it was a shock. Whatever the explanation, it comes down to paying higher taxes in 2011. I’m disappointed that Obama allowed this to happen.

  98. Anonymous

    How dare they mess with the retirees! I have worked and retired from Federal Government and what thanks do we get! How are we suppose to make it! Everything is up but our annuities!

    Someone has go to do something!

  99. Anonymous


  100. Anonymous

    I noticed an increase in my federal tax on my pension payment from my company. My supplemental health insurance when up $55.00 per month and now my pension is $54.00 less a month with no COLA on my Social Security. I am so sick of all of this. The powers to be (no matter what party) have ways of sneaking increases in on us and we find out about it when we get our checks. I guess we don’t have any extra money in Washington as we are sending all of it to other countries!!!!!!!!!!!!!

  101. Anonymous

    Hummm…. I just did my taxes with TaxAct and it added in the “making work pay” amount automatically. Of course after I sent off the e-file, I got a message back that the IRS won’t accept returns that are itemized until February 14 because of the new tax laws. I guess that means my refund will be less too…

    Spend and spend, Tax and Tax…. our government is Out of Control!

  102. Anonymous

    My wife and I are retired federal employees. We received our shocker Notice of Annuiity Adjustments, noting that our combined monthly federal tax withholding increased from $835.72 to $929.40. We were expecting an increase?? Someone fell down by not warning about the shock?

  103. Anonymous

    Making work pay was a tax break for folks who worked, ie, had W2s which is my case, although I also get a pension and SS. Now MWP is going away so I have seen a small tax increase –400 a year means about 8 bucks a week on my work withholding. It puzzles me why folks getting pension income should also see an increase since pension incomes are defined as non-earned income — you don’t work and get a W2.

  104. Anonymous

    For those of you who are retired, are your retirement checks as a result of pre-tax contributions or post-tax? If post-tax, then the government should NOT be getting one penny of that money. But, of course, if pre-ta, such as what is taken out prior to the other withholdings and going into a 401k, then yes, that should be taxed. But it still doesn’t make sense, since this should be done according to one’s tax bracket.

    For the gub’mint, it’s a one size fits all type of thing. And it’s also known as double dipping. Their mission in life is to have us constantly coming and going. I also find it mind-boggling that those of us with small incomes are being taxed, yet others above a certain pay level aren’t affected by it.

    It’s gotten truly pathetic! Anything they say now have fallen on [my] deaf ears. I don’t believe them for one iota of a second! :::::eyerolling::::

  105. Anonymous

    I’m a retired federal employee and noticed my federal taxes increased by $68 a month . My wife is also retired federal employee and her federal taxes increased $45 a month. Haven’t had a cost of living increase the past 2 years because the government claims the price of gas and food hasn’t increased much. Our health insurance increased last June , but I did notice our dental insurance decreased by .09 a month . Also while I was trying to make sense and questioning my wife , why she changed what I claim for federal taxes , I heard on the news that for the past 7 or 9 years the United States has given Egypt about 51 billion dollars and I don’t think there’s a war there.

  106. Anonymous

    I am a 30 year retiree from the Federal Govt. Income tax witholding up $30 per month. Health care costs up $35 per month. No COLA for past 2 years, no SS COLA and my employer has a freeze on raises for the past 2 years. I am 72 and still have to work 40 hours a week to keep my head above water. I have custody of 2 teen age children. Thanks a lot Obama. So much for not raising the taxes on the lower class. No light at the end of the tunnel.

  107. Anonymous

    The Making Work Pay credit was a casualty of the negotiations over extension of the Bush tax cuts. From what I read, the republicans did not like this particular credit because they said it resulted in cases where certain individuals paid no federal income tax last year. Obama conceded on the point and, subsequently, the credit was allowed to expire. What I can’t understand is why this was agreed to. If the Bush tax cuts were good for the economy, why weren’t the Obama tax cuts. This is the kind of stuff that gives government a bad name.

  108. Anonymous

    Ok I will weigh in as mine went up 42$ a month..Health Insurance went up 28$/month and medicinal co-pays up 2$ per prescription.. And no Cola cause of their math that says nothing went up???
    This math equates to 78$/month overall increase..Thanks OBAMA..

  109. Anonymous

    i have over $30 increase in fed taxes withheld. i am retired and have not received “work pay” nor am i affected by s.s. decrease since i am a state retiree. so i am really impressed with the latest gov. deal. too bad obama is going to be a one term pres. he sold us down the river. my husband is also retired so thanks again. i hope everyone is aware of how this affects the poorest of us.

  110. Anonymous

    I don’t care if these increased taxes are the result of a democratic or republican issue, all I know is that my husband and I are retired, don’t pay SS any longer and can’t for the life of me understand what justification the federal government has for taking an additional $85 out of our bring home pay!!! I’ve been retired a few years longer than my husband and have not received a pay increase of any kind. I’ve listened to the politicians tout no increase in taxes and felt some relief. But when we received our pay stubs this month,I was really shocked to see the HUGE increase in federal tax deduction! What the hell? Lower taxes for the rich and higher taxes for us?

  111. Anonymous

    I am also retired and living on a small soc sec and fed retirement. Insurance went up, but the Fed witholding doubled. Why? Will it be adjusted in the next month or so!

  112. Anonymous

    My husband and I are both retired and what a shock when our retirement checks came yesterday!!! I thought the taxes were staying the same so I expected the same pay as last year! We are both retired teachers so are not covered by social security. Our paychecks combined were $68/month less. We have received no cola’s for three years. After 1 1/2 years of retirement, I am making $36/month less with no hope of seeing any increases in pay, only another increase in insurance come July.

  113. Anonymous

    I just received a notice that they will be taking $50 more out of my pension for taxes every month and also that my health insurance will be going up too. I’m not voting for anybody ever again, democrat or republican

  114. Anonymous

    First let me state that I am a democrat. That being stated, I am so confused. Were we screwed. I hear them say they were lowering taxes on the pres conferences. I know the rich got a big break but us low enders were suppose to get tax cuts too. Was it all a lie. 50 dollars less a month from 2 jobs is 100 less a month and some rich person gets more money. I think this may end up being a huge problem. The poor can not take it anymore. Look what is happening in Eygpt and Greece. It happen years ago in France. All we now is for our Government to say “let them eat cake”.I can nt afford to wait for a refund tog et this monry back a year from now. This is going to set back the economy and business will fail. 2011 the year of a great depression. Thanks all you elected government officals.

  115. Anonymous

    I’m still puzzled. Both my wife and I are retired and we receive a civli service pension. Our federal tax withholding was increased by a large amount, but neither of us work. So how did that come about? Once more the rich make out and the poor and middle class get screwed. Come from electing all those Regressives to Congress.

  116. Anonymous

    all I know is that I am retired and not only did my health insurance increase so did my Fed Withholding Tax. It does not pay to retire anymore unless you are rich and then it don’t matter. I am making less and less every year on retirement. People complain cause then only got a 1% raise, well we on Social Security and other pension plans did not get any raise – just more and more is taken out of our pockets every year.

  117. Anonymous

    I was looking forward to the additional 2% on my paycheck this year. However, I wasn’t aware that the Making Work Pay credit was only good for 2 years. So, therefore, they kind of washed each other out. BUT, I’m still bringing home less money because of our increase in medical insurance. No one can get ahead in this game. It’s all one big joke anymore. We are supposed to get a 2% wage increase this year. That might result in about $5 more per paycheck after the all the additional deductions. It seems like everyone has their hand out wanting my money the minute I start making more….

  118. Anonymous

    Thank the @@@@ Democrats incharge – they are always for the poor people BUT what have they ever done for the poor – they have the plantation mentality of “as long as we keep the people ignorant, always giving handouts, with no encouragment to take responsibility for themselves” they will always vote Democratic. The Republicans also have problems – they both get in office & keep their party at the top – they are supposed to be American first not Democrats or Republicans. They can’t look out for the good of the country with always having their own agenda. They need term limits – that way they can represent the people with nothing like an election held over their heads.

  119. Anonymous

    I received my usual 3% increase to my pension – which amounted to $66 – I ended up with $8.76 increase on my check. Government as usual the guy on the street gets screwed every time.

  120. Anonymous

    Taxes, taxes, taxes. I am in the cigar business.
    Love it or hate it, it makes no difference. But
    our litle factory of 25 generated around $125,000
    for our numerous stockholders to share. Our good
    government got over $800,000 in excise tax to blow
    however they wanted under the guise of S-chip (State
    Children’s health insurance program), signed by Mr.
    Obama after taking office. Now why would they reduce
    employees contributions to Social Security when we
    all know it is already WAY underfunded? Personally,
    they figured we stupid people would not notice the
    federal deduction was going back up. Smoke screen!

  121. Anonymous

    BG, thank you for the helpful information. Unfortunately, you’re forgotten that the Payroll Tax Holiday was proposed by Democrats not Republicans. The tax bill was passed by a Democrat controlled House and Senate and signed by the President. If President Obama, Speaker Pelosi, or Senate Majority Leader Harry Reid were opposed to the tax bill, how could it have passed? Why didn’t Democrats include extending Make Work Pay in the bill?

    You are correct that we shouldn’t have gone into two wars while decreasing taxes. I think you’ll find that most Republicans agree. Most Republicans don’t want policies that benefit one group more than another, but they feel the best way to create jobs is to provide money to people who create jobs. I’ve worked for almost forty years and I haven’t created a single job. But my employor creates hundreds of jobs my spending his money on the research and development of Bio-Fuels. Why should he pay a higher tax rate than I do just because he makes more money? He is doing more to help society by creating jobs than I ever could through comsumer spending. Isn’t the owner of an accounting firm helping society more than a single accountant who employs no one?

  122. Anonymous

    OK but the BIG question here is:

    How can Obama take “credit” for a payroll tax holiday and say that the temporary SS tax reduction will stimulate the economy when it is already eaten up (and more) by the elimination of the Federal Income Tax “Making Work Pay” credit? Just sounds like another “3 Card Monte” smokescreen by this lying & manipulative Chicago Politician.

  123. Anonymous

    Shouldn’t we all stop thinking about ourselves and what this increased FIT withholding does to our lives and our families, and instead focus our hope that Wall Street doesn’t have to pay excessive taxes on their trillion dollar profits and billion dollar bonuses?

    C’mon fellow Peasants. Show a little heart.

  124. Anonymous

    I’m with you Gary. It’s very disappointing when you work hard and bring home less. I think everyone who voted for Obama should be complaining as their paycheck goes down and taxes go up. Maybe they learned their lesson!

  125. Anonymous

    That would all be well and good if the economy was robust and people had money in their pockets but the average person is saddled with increasing debt, facing foreclosure, unemployment and some wondering where their next meal is coming from. I never complained about the Payroll Tax holiday as I do not pay S.S. but I do compalin when my withholding goes up dramatically.Does it stimulate the economy when I start cutting things out of my budget to make up the $150 extra loss of income? As a government employee I have not had a raise in 6 years, have had my benefits slashed in half and after 32 years am faced with the fact that because of bad investments by the government I work for I will have drastically reduced pension if I’m lucky to have one at all. W Yes we are fighting two wars but we are also funding pork belly products for all the rich politicians. Its time to say “we’re mad as hell and we’re not going to take it anymore”!

  126. Anonymous

    I can’t wait until next year when everyone starts complaining when their Social Security taxes go up 47% — which is just back to 2010 (and the prior decade) levels after the ‘Payroll tax holiday’ ends.

    It is amazing to see people who pay very little (if any) income taxes in 2010, now complaining that they are paying more in 2011. It is twice as amazing to see people who pay NOTHING in social security taxes (gov employees) complain that they aren’t getting the ‘Payroll Tax Holiday’ tax-break in 2011.

    Here is a clue people: federal taxes need to go up 48% (from 2010 levels) just to balance the budget. We have been fighting two wars for 10 years, and instead of raising taxes 10 years ago (to fund the wars): they were lowered in 2001, 2003, and the low rates were just extended for two more years.

    For all the ‘poor’ people out there who voted Republican: you are getting exactly what you deserve/voted for. Lower taxes for the rich, higher taxes for the poor, and never ending deficits and massive federal debt.

    Democrats aren’t blameless as they need to grow some [email protected] and stop caving into Republican demands & threats (ie; “republicans holding the middle-class hostage to secure massive tax-breaks for the rich”).


  127. Anonymous

    One more reason to not trust the government. Seems like everything you heard with regards to the tax cuts expiring last year pointed toward “more money in your paycheck” with an emphasis on “2% decrease in payroll taxes.” I surely don’t recall hearing anything about the MWP tax credit expiring. I was suprised when I got my first paycheck for 2011 and the increase in net pay was a mere $15. I guess I should be greatful, but it is disappointing when you are expecting that number to be 2-3 times more. I just keep hoping a flat tax will come soon.

  128. Anonymous

    On my latest paycheck my witholding tax increased $75.00. I do not pay S.S because I am a county government employee. I am divorced and my children are grown and I no longer have any deductions. My co worker is married with children and my withholding is 4 times what his is. I was supposed to retire 7 years ago but with each blow to my paycheck and loss of benefits I find myself having to keep working despite declining health. I found an old check stub in my drawer and my bring home pay 10 years ago was more than what it is today. People that have never worked a day in their lives have more benefits than those of us that have worked hard their entire lives.

  129. Anonymous

    If the Republicans were so against expiration of ALL tax cuts, why would they and Obama agree to let only this “Make Work Pay” tax credit for the poorest Americans expire? Why keep the tax cuts for the rich and not this one for the poor (20K is poor!)? It makes no sense and it goes against Obama’s promises.

  130. Anonymous

    First the Republicans were the ones to hold everything up because their rich friends more money and not have to pay anything extra even thought they would never notice it.

    Second is a question is the tax cut/increase because I do not pay into soc. sec. permanent or is it going to go back after a year or until Washington wants to change it?

  131. Anonymous

    It’s just like you demoncrats to blame Republicans for everything. You people are the biggest whiners in the world. Republicans are in charge you blame them demoncrats are in charge you still blame the Republicans, you are ridiculous.No wonder people hate demoncrats. Also demoncrats is not a spelling error.

  132. Anonymous

    #28 base) There isn’t a massive bank account containing everyone’s Social Security contributions. Think of it more like a pyramid scheme: the money you pay today, goes to someone in retirement today.

    The question is: will our kids (and their kids) keep playing along when we are in retirement?

    I’m betting not, so it is on us (the current working generation) to save for our own retirement (in 401ks, etc), while also paying for our parents/grand-parents through continual SS-tax withholdings…

  133. Anonymous

    What a joke. My federal tax deduct increase was about the same as my social security tax deduct savings. If I have this right, govt. has found a way to dip in to the SS# fund in a way we all can see instead of just stealing it. I guess this puts to sleep the myth if it will be there in the future.

  134. Anonymous

    #22 LGS) you lost the ‘Make Work Pay Credit’ in 2011. So that is an $800 increase in income taxes. However, based on your numbers, you should see a decrease of $2,400 for the ‘Payroll tax holiday’ (if neither of you are government employees who do not pay Social Security taxes).

    So you are paying $1,600 less in taxes in 2011 (compared to 2010) — about a $133 monthly increase. As said earlier, companies have a few months to get the ‘payroll tax holiday’ withheld from your paychecks appropriately though — so if you aren’t seeing the money today, you will by March/April.

    #24 Zole) BTW: I claim 8 deductions on my W4 (married w/ 2 kids, single earner) — my withholding is about perfect, I normally get a small refund, or owe a small amount when I file.

  135. Anonymous

    #24 Zole2112) sounds like that person doesn’t have their W4 filled in accurately — they likely get large tax refunds when they file. “0 deductions”, is probably not accurate for anybody — unless you are the lower earner in a two-earner household and the difference in earning is large between you and your spouse.

    #23 Baker) Your company has until the end of March to get the Social Security tax portion straightened out on your paystub. The ‘Make Work Pay’ tax-credit is located at:

    “Once you complete Schedule M, you’ll transfer the dollar figure you come up with on line 14 of that document to either line 63 of Form 1040, line 40 of Form 1040A or line 60 of Form 1040NR. Form 1040EZ filers will take their work sheet calculation and enter it on the EZs line 8.”

    So, look at your 2009 tax form and make sure you got that credit. If not, you can file an amended return for 2009 to get the refund (and ensure you do 2010 correctly).

  136. Anonymous

    For those that are still confused, we got a letter from ADP with our first payroll that said due to congress dragging their feet, the first paycheck of the year would reflect Federal tax rates that would have been had congress not kept the rates the same. Your second pay check of the year should see the tax rates changed back to previous year amounts.

  137. Anonymous

    I just checked the tax rates and some of the Federal tax withholding rates are going up more than the reduction in our SS rate (2%). One of my employees had her SS reduced by about $9.70 but her Federal withholding went up by $15 so she loses $5.30, on total wages of $504, to a tax increase. If you make $5880/month with 0 deductions your SS goes down by $117 and your tax withholding goes up by $47 so your overall decrease is $70. So much for not raising taxes on people making under $250k.

  138. Anonymous

    BG and Sherry- My other withholdings did not change just the Federal. Also Since I file jointly with my husband how do I get that money back. I have never heard of the “make work pay” credit. I can’t believe how they take money from those who earn so little. My federal withholding went up more than 50%. Doesn’t make any sense

  139. Anonymous

    I have to disagree with the statement that higher incomes will see a decrease. – I just ran payroll for myself and I am not in the 30k & less bracket and my witholding increased by $70 for one pay period. That’s up $69. I think it’s a increase across the board. Personal income is 50k, and husband’s is 70k.

  140. Anonymous

    I, too, have a state position in which I do not pay into social security, but am forced to pay into the nation’s most broke pension system (IL). I did not get a raise. My actual take home pay has decreased as a result of higher federal taxes. I am in-effect making less money this year than last.

  141. Anonymous

    Frank – I’m in the same boat as you. I work for a school district that does not pay into social security. My withholding went up $53 per month. Something is wrong with this picture! No tax increase for couples making less than $250,000. What a joke!

  142. Anonymous

    Sherry) The ‘Make Work Pay’ credit, which existed in 2009 and 2010, was a credit that was directed towards the lower earners. High earners didn’t actually get a reduction in taxes with that credit.

    Now, in 2011, everyone (low and high earners) are getting a 32% reduction in the Social-Security portion of the FICA-OASDI tax. Specifically the rate went from 6.2% (of every dollar) down to 4.2%.

    In the end: your income tax is higher in 2011, but your social security tax is lower. Unfortunately, the way the math works, is that couples earning less than $40k (singles less than $20k) will have an overall tax increase. People who earn more than that will see an overall tax decrease.

  143. Anonymous

    #13 Baker-I am in the same boat although I am married with kids…..my withholding doubled; about $15 less bi-weekly for me. I was trying to figure out why and have come to understand of how the Making Work Pay Credit worked and that makes sense. 26 weeks x$15 and there we go. I only make about 33K a year-sad but true. Am I to understand that basically now we are having that credit taken away, but for those that make more money and are possibly in the next tax bracket, they are seeing more in there paycheck and having less taxes taken out? This just seems so unfair.

  144. Anonymous

    Some of us work for state and local governments where we do not pay the Social Security tax, but do pay into a state of local system. Because of this we get no break from the Payroll Tax Holiday, but we will pay more tax because of the expiration of the Making Work Pay Credit. I’m having about $45 per month more withheld from my salary.

  145. Anonymous

    Baker, Yes thats correct. You’re paying $15.19 more per check which is about $400 total for the year. (15.19 x 26 = 394.94)

    Mark, “Right now our tax rates are historically low, with all the debt the US has incurred, a tax rate increase is reasonably foreseeable in the future.”

    Someone could have made that same argument in the 90’s or the 80’s or the 70’s. Our national debt has done nothing but go up and up and up over the past 60 years and tax rates have done nothing but go down down down at the same time. Yet today its all different? Why is that?

  146. Anonymous

    #13 Baker) if by ‘biweekly’, you mean “every other week” — then those numbers sound right if you are single. The difference is $400/year which was the value of the ‘Make Work Pay’ credit that existed last year (and doesn’t in 2011).

    Check to see that your FICA/SSA portion is 30% less than what it was last year (for the ‘Payroll-tax Holiday). But, as Nickel said, companies have until the end of March to get the FICA-OASDI portion straightened out.

  147. Anonymous

    #12 SomeGuy) I’m assuming that the low brackets will always exist and that they are adjusted for inflation every year. This has historically been true.

    I do agree that I believe taxes will increase: and that will be done by the (re)creation of the higher marginal tax brackets. But the lower brackets should still be filled with money from traditional accounts, especially for the ZERO bracket if not for the others. (The zero-bracket is the standard deductions and personal exemptions).

    The only major risk/change I can see, is the implementation of side-kind of ‘Fair-tax’: which is essentially a national sales tax. If this were to happen, again, it would be wise to be avoiding Roth-type of accounts as much as possible — because you’d be paying the income-tax today, as well as, the national sales tax in the future.

    If you think your _effective_ tax rate in the future, is going to be higher than your highest _marginal_ tax rate today: then go with Roth (and good luck to you).

  148. Anonymous

    Ok, I read the article but still don’t understand. When I received the firest paycheck for 2011 by Fed tax went up from 13.28 biweekly to 28.47 that is nuts. I only work 40hrs per biweekly paycheck. Is my Payroll person messing this up?????????

  149. Anonymous

    BG and Others,

    BG’s math assumes that income tax rates and tax law in general are the same in retirement as now. For those with long retirement horizons and/or those who think taxes are inevitably going to have to increase, that could be a flimsy assumption.

    Also keep in mind that a Roth IRA does not require distributions to be started at any age, whereas I believe both 401(k) and Traditional IRA plans do (and Roth 401(k)s, for that matter).

  150. Anonymous

    #10 Mark) I agree with you overall, but there are details I disagree with. For example, Roth -vs- Traditional accounts: both offer two different styles to avoid taxes. Roth lets you avoid future taxes, but you are taxed today at your _highest_ marginal bracket. Traditional accounts allow you to avoid taxes today (at the highest marginal bracket) to pay _future_ taxes at whatever rate they may be.

    But the devil is in the details. In the future (just like today), there is a very good possibility a good chunk of income will be tax-free. For example, a married couple with no kids in retirement pays no taxes on the first $19,000 of income ($11,600 standard deduction plus two personal exemptions of $3,700 each). If they take that money out of a traditional IRA (versus a Roth), then they paid no taxes going in, and more importantly no taxes coming out either (including on the growth).

    If that money is coming out of a Roth account, then they paid taxes (in the past) NEEDLESSLY.

    The same logic goes for the next $17,000 of income: it is only taxed at a 10% rate (today). The next $52,000 of income is taxed at 15% — if you are in the 25% bracket today, are you saving enough in traditional accounts to fill the 0%, 10%, and 15% brackets? Most people would likely answer NO if they took an honest look at their savings rates.

    This means that if you are in the 25% bracket today, you need to be saving enough in traditional accounts to generate $88,000 of yearly income before even considering a Roth. If you were to draw down your retirement savings at a 4% rate (in retirement), you need to have more than $2 million (in today’s dollars) in traditional accounts (not Roth) just to fill the low brackets.

    “Right now our tax rates are historically low”: I agree with that for very high wage earners, they are paying some of the lowest rates we’ve ever had in the US. These people should look at Roths as a hedge for new/higher marginal tax brackets being created in the future. But they also should be using traditional accounts to fill the lower future brackets too.

    Of course, there are people on the margins that are very close to a tax-bracket: if just above a tax-bracket, go heavier on the traditional side. If just below a tax-bracket, go heavier on the Roth side.

    “The smartest actions would be to use all the tools (401(k), IRA (Regular and Roth), HSA, etc.) available to you to minimize your total (current and reasonably expected) tax exposure.”

    I absolutely agree with that.

  151. Anonymous


    While the tax deferrals on 401(k)s, IRAs, and HSAs sound like a windfall, one must keep in mind that when the 401(k) and IRA funds are eventually withdrawn, these withdrawals will be taxed at rates in effect on the date of withdrawal. Who knows what they (tax rates) will be then. Right now our tax rates are historically low, with all the debt the US has incurred, a tax rate increase is reasonably foreseeable in the future. Personally, I would prefer to pay taxes now (low rates) on my retirement investment contributions rather than later (high rates). Also, the earnings on Roth IRAs are exempted from tax when withdrawn, another good reason to use this retirement tool. The smartest actions would be to use all the tools (401(k), IRA (Regular and Roth), HSA, etc.) available to you to minimize your total (current and reasonably expected) tax exposure.

  152. Anonymous

    Ah, the money games the politicians love to play with our taxes.

    I say make it a flat tax for all concerned; that will be the best and only way to reduce the deficit. Because the more they try to wrest from us what we earn, the more complicated things will get….and the sooner we’ll end up in the poorhouse.

  153. Anonymous


    Sort of. While the amount paid into SS will obviously be lower than usual in 2011, it won’t affect the benefits you receive upon retirement. The Fed will borrow around 112 billion to keep SS whole.

  154. Anonymous

    In other words “our” money that is deducted for retirement has been lowered. The money that goes to “Uncle Sam” has been increased. What a smokescreen.

  155. Anonymous

    Jim) yep, you are right: $20k (single) or $40k (married) are approximately the break even points.

    Make less than those numbers, then bigger tax bill this year. The more you make, the less your taxes are this year.

    I try to tell anyone who will listen: the best investment you can truly make is to not pay taxes (legally). Use 401k’s, use HSAs, use traditional IRAs (not Roth!!), use whatever accounts/tricks/incentives the government throws out there to reduce the taxes you have to pay today — cause once paid, you never get it back.

    For example: my HSA contributions are giving me a 41% guaranteed return on that money — just by avoiding the tax. How?!?: it only costs me $4,354 in take-home pay to fully fund the $6,150 HSA account.

    Kathy said) “…we were told…really not true…”
    I hope you didn’t vote Republican, because that is the reason right there.

  156. Anonymous

    BG, 2% of 20k is $400 which is the amount of the ‘making work pay’ credit. so shouldn’t the break even point be $20k rather than $30k?

    In other words last year you would get $400 credit with ‘making work pay’. THis year you get 2% off the payroll tax. 2% of $20k is $400. So if you made less than $20k then your 2% will be lower than the $400k but if you make over $20k then it will be more.

  157. Anonymous

    In other words the extra money that we were told we would be getting on our payroll checks so that we can stimulate the economy is really not true. Althought we are getting a 2.2 percent cut on our social security taxes our federal income taxes are raising due to the making work pay credit is expiring. How is this suppose to put more money in our checks?

  158. Anonymous

    One other comment: if you are a wage earner who earns around $30k or less a year: your overall taxes will go up in 2011.

    This is because the “Make Work Pay” credit you were receiving in 2010 was worth more than the “Payroll Tax Holiday” that everyone (including the rich) is receiving in 2011.

    For people earning more than $30k a year, 2011 will have lower taxes for you than 2010. 2012? nobody has a clue what taxes will be like then…


  159. Anonymous

    Thanks for the heads up. I haven’t gotten the first paycheck for the year yet, but good to know any inconsistencies will be corrected come end of March.

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