[Code of Federal Regulations]

[Title 32, Volume 1]

[Revised as of July 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 32CFR78.5]



[Page 455-456]

 

                       TITLE 32--NATIONAL DEFENSE

 

              CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE

 

PART 78_VOLUNTARY STATE TAX WITHHOLDING FROM RETIRED PAY--Table of 

Contents

 

Sec.  78.5  Procedures.



    (a) The Uniformed Services shall comply with the payment 

requirements of the state, city, or county tax laws. Therefore, the 

payment requirements (biweekly, monthly, or quarterly) of the state, 

city, or county tax laws currently in effect will be observed by the 

Uniformed Services. However, payment will not be made more frequently 

than required by the state, city, or county, or more frequently than the 

payroll is paid by the Uniformed Services. Payment procedures shall 

conform, to the extent practicable, to the usual fiscal practices of the 

Uniformed Services.

    (b) A member may request that the State designated for withholding 

be changed and that the subsequent withholdings be remitted as amended. 

A member may revoke his or her request for withholding at any time. Any 

request for a change in the State designated or any revocation is 

effective on the first day of the month after the month in which the 

request or revocation is processed by the Uniformed Service concerned, 

but in no event later than on the first day of the second month 

beginning after the day on which the request or revocation is received 

by the Uniformed Service concerned.



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    (c) A member may have in effect at any time only one request for 

withholding under this part. A member may not have more than two such 

requests in effect during any one calendar year.

    (d) The agreements with States may not impose more burdensome 

requirements on the United States than on employers generally or subject 

the United States, or any member, to a penalty or liability because of 

such agreements.

    (e) The Uniformed Services shall perform the services under this 

part without accepting payment from States for such services.

    (f) The Uniformed Services may honor a retiree's request for refund 

until a payment has been made to the State. After that, the retiree may 

seek a refund of any State tax overpayment by filing the appropriate 

State tax form with the State that received the voluntary withholding 

payments. The Uniformed Services may honor a retiree's request for 

refund until a payment has been made to the State. State refunds will be 

in accordance with State income tax policy and procedures.

    (g) A member may request voluntary tax withholding by writing the 

retired pay office of his or her Uniformed Service. The request shall 

include: The member's full name, social security number, the fixed 

amount to be withheld monthly from retired pay, the State designated to 

receive the withholding, and the member's current residence address. The 

request shall be signed by the member, or in the case of incompetence, 

his or her guardian or trustee. The amount of the request for State tax 

withholding must be an even dollar amount, not less than $10 or less 

than the State's minimum withholding amount, if higher. The Uniformed 

Services' retired pay office addresses are given as follows:

    (1) Defense Finance and Accounting Service, Attn: DFAS/PRR/CL, 1240 

East Ninth Street, Cleveland, OH 44199-2055.

    (2) Coast Guard: Commanding Officer (RPB), U.S. Coast Guard Human 

Resources Service and Information Center, 444 S. E. Quincy Street, 

Topeka, KS 66683-3591.

    (3) U.S. Public Health Service Compensation Branch, 5600 Fishers 

Lane, Room 4-50, Rockville, MD 20857.

    (4) National Oceanic and Atmospheric Administration, Commanding 

Officer (RPB), U.S. Coast Guard Human Resources Service and Information 

Center, 444 S. E. Quincy Street, Topeka, KS 66683-3591.

    (h) If a member's retired pay is not sufficient to satisfy a 

member's request for a voluntary State tax, then the withholding will 

cease. A member may initiate a new request when such member's retired 

pay is restored in an amount sufficient to satisfy the withholding 

request.

    (i) A State requesting an agreement for the voluntary withholding of 

State tax from the retired pay of members of the Uniformed Services 

shall indicate, in writing, its agreement to be bound by the provisions 

of this part. If the State proposes an agreement that varies from the 

Standard Agreement, the State shall indicate which provisions of the 

Standard Agreement are not acceptable and propose substitute provisions. 

The letter shall be addressed to the Director, Defense Finance and 

Accounting Service, 1931 Jefferson Davis Highway, Arlington, VA 22240. 

To be effective, the letter must be signed by a State official 

authorized to bind the State under an agreement for tax withholding. 

Copies of applicable State laws that authorize employers to withhold 

State income tax and authorize the official to bind the State under an 

agreement for tax withholding shall be enclosed with the letter. The 

letter also shall indicate the title and address of the official whom 

the Uniformed Services may contact to obtain information necessary for 

implementing withholding.

    (j) Within 120 days of the receipt of a letter from a State, the 

Director, Defense Finance and Accounting Service, or designee, will 

notify the State, in writing, that DoD has either entered into the 

Standard Agreement or that an agreement cannot be entered into with the 

State and the reasons for that determination.



[50 FR 47220, Nov. 15, 1985, as amended at 50 FR 49930, Dec. 6, 1985; 68 

FR 36914, June 20, 2003]



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