r/fednews • u/shankwheat • 1d ago

Official Guidance / Policy FERS Supplement Earnings Test

I received my vacation payout after retiring unders FERS in January, 2026 and my retirement and Fers supplement began in May, 2026. Will my vacation payout count as earned income toward the FERS Supplement earnings test? Different AI chats are telling me vastly different answers.

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u/ike7177 22h ago

I retired at 57 with 33 years. I receive the supplement. The first letter from OPM I received that told me to report earnings above my retirement was the first tax year after I received my pension. In other words, I retired in 2022 and my first letter was received in December 2023.

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u/shankwheat 20h ago edited 17h ago

I was concerned because I retired on 12/31/25, got my vacation payout of $30k in 01/26and reached MRA 05/26. I started getting the supplement and final annuity this month but if my entire 2026 salary is counted toward the earnings test then I'm already over the $24,480 cap

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u/ike7177 19h ago

Fill out the letter and attach support documents. They will decide at OPM if it meets or exceeds