In conjunction with the U.S. economic stimulus plan’s new federal tax credit for working Americans, federal tax withholding amounts will change beginning April 1. This will impact your monthly benefit payment paid by FPPA beginning with the April 21, 2009 disbursement.

If you have federal taxes withheld based on marital status and the number of exemptions claimed (as opposed to a fixed withholding amount), the effect will be a decrease in the tax withheld and a corresponding increase in your monthly payment. As a result, total annual under-withholding could be up to $400 for individuals and up to $800 for married couples filing jointly.

Unless you request a change to your withholding, the amount you owe in federal taxes (or the refund amount) may differ from your expectations when you file your 2009 tax return. We urge you to discuss these tax-table changes with a qualified tax advisor to determine if a withholding change for your pension is warranted.

If you decide to make a change, you will need to file a new W-4P Monthly Pension Distribution Form with FPPA. Click here for the form - or you may request one be mailed to you by calling (800) 332-3772. The form generally must be received by the 10th of the month in which you want the change to occur.

For additional information, visit the IRS Web site www.irs.gov and use the Withholding Calculator, or review Publication 15-T and IRS Publication 919 - How Do I Adjust My Tax Withholding?.