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Indiana Public Retirement System

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Indiana Public Retirement System (INPRS) > Publications > Newsletters > Tax Levy on 13th Check/COLA Tax Levy on 13th Check/COLA

Q: What is a tax levy?
A: A tax levy is an action taken by the IRS to satisfy an outstanding debt. The IRS requires money or property be withheld to satisfy a debt.

Q: Is my 13th check/Cost of Living Adjustment (COLA) subject to a tax levy?
A: Yes, if you have an outstanding debt with the IRS, money must be deducted from your 13th check/COLA.

Q: How is INPRS notified that money will be withheld from my 13th check/COLA?
A: The IRS notifies INPRS that a member owes a specified amount and is subject to a tax levy. We calculate the appropriate amount to withhold based on the information provided by the IRS. We will withhold that amount until the IRS notifies us to stop withholding.

Q: How do I find out the amount I owe to the IRS?
A: You must contact the IRS.

Q: Can I pay off my debt as a lump sum or in installments and avoid the tax levy?
A: You must contact the IRS. INPRS will continue to deduct until the IRS has informed us otherwise.

Q: Is this a new practice or has INPRS withheld money from 13th checks/COLAs in the past?
A: Benefits were adjusted for a tax levy when previous COLAs were given. We have never withheld a tax levy on 13th checks, but must do so moving forward.