Help with Firefighters retirement withhdrawal.

[PIGLEE]

I have a parttime firefighter that has been paying into a retirement. He has retired and is now drawing social security. This last year with the market dropping, he decided to withdraw his retirement. I need to mention we are in a small town, small fire dept. We have been waiting for a 1099R to finish his return. He received a check for 21501.00, they told me they did withholding. We are now finding out that they withheld a little more than 7%. If I use 7.65% we come up with about the right amount they withhold (although we have no exact number), just the difference between what he withdrew, and what he received in the check. They are inisting that they have to put it on a W-2, but are now saying he only has to pay medicare, like the Public Safety Employees pay (They are not covered by Social Security only medicare for their W=2) Their retirement is put on a s1099R.

That is about all the information I have today. Has anyone else see anything like this?

If the 1749.00 is not FIT withholding, but Medicare and Fica, that money is down the drain. But his main concern is because he is only 62, he will have to pay back a lot of money to Social Security. Right now his earned income is under the limit for Social Security, we have put some planning into this so he did not loose any, or have to pay back Social Security.

Does anyone know if a W-2 with Medicare taxes (no FICA) will affect Social Security earnings limits?

Please help!! Thanks.

[newbie]

Sounds like this would fall under the "special payments" for wages earned while receiving social security benefits. Kind of like vacation pay, social security looks at when it was earned. He'll probably need to go right to an office but if he can get a letter from the town to say he did not work to earn the monies but it was payment for prior services he will not have to pay back any of his social security benefits.