Annual leave – lump sum, deductions


Q: I retired on July 3 under CSRS Offset (law enforcement/firefighter). I just received the lump sum payment for my unused annual leave. Deductions for federal and state taxes and Medicare were taken out. There was no deduction for CSRS Offset retirement (typically 1.3 percent), but 6.2 percent was deducted for OASDI. Is the lack of deduction for CSRS-Offset retirement and the deduction for OASDI correct? It seems that it should have been both or neither.

A: There weren’t any deductions for CSRS Offset retirement because you are no longer an employee. On the other hand, the lump-sum payment is considered to be earned income; therefore, Social Security deductions were taken out.


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

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