Ask Larry

Hi Professor Kotlikoff,

How does the IRS acquire the information needed to calculate the WEP Guarantee? Would I have to provide
this information? My state retirement for non-covered time and covered time is given 0.00 years not months
which the IRS appears to use; will the IRS accept this? The IRS Manual(POMS) says the Guarantee is based on one half of the total amount of pensions attributable to post 1956 non covered work but then the examples
only account for months of the uncovered time; this will not take into account different benefit percentages
for non covered and covered time in the same State retirement system.
Lastly, do the personnel in a Regional office make these calculations? Do you have the right to review
the IRS calculations prior to IRS approving them?

Thank you for your assistance

Hi. First of all, the Windfall Elimination Provision (WEP) is a Social Security regulation, not an IRS regulation. So, the IRS has nothing to do with WEP calculations.

The documentation that the Social Security Administration (SSA) uses to administer the WEP guarantee provision in some cases comes directly from the agency(s) paying the non-covered pensions, and in other cases from the person who is eligible for benefits. When you apply for Social Security benefits, you can submit any evidence you believe is pertinent to calculating your benefit rate accurately. And, if your benefits are affected by WEP and if you disagree with Social Security's benefit calculation, you have a right to appeal (https://www.ssa.gov/pubs/EN-05-10058.pdf).

Best, Jerry