Employees under “pure” CSRS don’t pay the Social Security payroll tax. Image: J.J. Gouin/Shutterstock.com
Dollar amount changes effective in 2023 of interest to federal employees and retirees include:
* The 6.2 percent Social Security payroll tax will apply on up to $160,200 of earnings, up from $147,000. For FERS employees, that tax cuts off at that threshold and from there on they pay only the civil service retirement contribution (which is either 0.8, 3.1 or 4.4 percent, depending on when they were hired). Above the cutoff CSRS Offset employees continue to pay their same 7 percent total (6.2 into Social Security and 0.8 into the federal retirement fund) but all the money after that point goes into the federal retirement fund instead. Employees under “pure” CSRS don’t pay the Social Security payroll tax.
* The interest paid in the voluntary contribution retirement savings program available to CSRS (but not FERS) employees is holding steady at 1.375 percent in 2023. That rate also applies as the interest rate for required deposits and redeposits into the retirement fund to get credit for service for which no contributions were taken or for which refunds were received at a break in service, as well payments as to capture credit toward federal retirement for military service time, for those eligible.
* The maximum tax-free amount allowable under the public transit subsidy program is rising from $280 to $300 a month. Policies vary among agencies and among locations within agencies, in some cases as set in labor-management contracts. Some pay a subsidy in the form of passes or vouchers purchased by the agency and others allow employees to reduce their pre-tax income by an amount equal to their transit or van pool expenses up to the maximum. The much-less-used tax-free benefit for parking at a transit subsidy is rising in the same way.
* The maximum that federal employees (but not retirees) can put into health savings accounts remained $5,000 (individually or for a couple) for dependent care accounts and rose by $200 to $3,050 (individually) for health care accounts. Elections for the 2023 plan year had to be made during the recently concluded open season, although some changes are allowable due to certain life events during a plan year. The maximum health care amount that can be carried forward in such accounts from 2023 into 2024 will be $610, up from the $570 that can be carried from 2022 into 2023, while in dependent care accounts there is a grace period up to March 15 to spend unused money from 2022. In both cases the individual must have that kind of account for 2023 to qualify.
January Raise Finalized, Will Range from 4.37 to 5.15 Percent
Spending Bill Allows 4.6 Percent Raise; Doesn’t Prevent a Future Schedule F
Some TSP Features among Many Policies Affected by Spending Bill
Most Expansion of GS Localities Put Off Until 2024; 2023 Raises Announced
Pay Agent Repeats Criticisms of Federal Pay-Setting Process
MSPB: Sexual Harassment in Federal Agencies Unacceptably High
Survey Finds Lack of Confidence in Channels for Reporting Harassment
Report Cautions Federal Employees on Recruiting Friends, Family
No Snow Days for You, OPM Reminds Offsite Workers
Extra Time Off around Christmas Holiday Unlikely This Year
See also,
The Process of Retiring: Last-Minute Changes
The Process of Retiring: Check Your Agency’s Work