Retired state workers will have an extra $5.7 million at their disposal this month because of the new federal tax plan, State Treasurer Dale Folwell announced Wednesday.
The changes to federal taxes, passed in December by Republicans in Congress and supported by Republican President Donald Trump, will raise taxes on some people and lower taxes for others. The biggest benefits will go to large businesses and individuals at the very top of the income ladder, but they’re not the only ones who will have more money at their disposal.
Retirement benefits are taxed, and the new federal tax plan lowers the amount of federal taxes on benefit payments to North Carolina retirees, Folwell said. The $5.7 million Folwell announced equates to about a 1 percent savings, since the state pays out about $500 million.
Since there are about 312,000 people getting retirement benefits from the state, the average person will save about $18 a month, which could amount to about $220 a year.
The first of the bigger-than-normal checks will be mailed out Thursday.
But Folwell, a Republican, said the savings might not have happened so soon if his office hadn’t gone through the tax paperwork quickly.
North Carolina had until Feb. 15 to update its numbers, so it was entirely possible that retirees would only start seeing the bigger checks next month. Folwell credited his employees for beating the deadline.
“I'm very proud of our team for taking the initiative so quickly after the new tax law was passed by Congress and signed by President Trump,” he said. “While we are in the check delivery business, it involves more than just buying ink and stamps. This is a testament to the outstanding job that our career public servants do to serve government workers.”
Doran: 919-836-2858; Twitter: @will_doran