This publication gives you the information you need to determine
the tax treatment of distributions you receive from pension and
annuity plans and also shows you how to report the income on your
federal income tax return. How these distributions are taxed depends
on whether they are periodic payments (amounts received as
an annuity) that are paid at regular intervals over several years or
nonperiodic payments (amounts not received as an annuity).
What is covered in this publication?
contains information that you need to understand
the following topics.
- How to figure the tax-free part of periodic payments under a
pension or annuity plan, including using a simple worksheet for
payments under a qualified plan.
- How to figure the tax-free part of nonperiodic payments from
qualified and nonqualified plans, and how to use the optional methods
to figure the tax on lump-sum distributions from pension, stock bonus,
and profit-sharing plans.
- How to roll over distributions from a qualified retirement
plan or IRA into another qualified retirement plan or IRA.
- How to report disability payments, and how beneficiaries and
survivors of employees and retirees must report benefits paid to
- When additional taxes on certain distributions may apply
(including the tax on early distributions and the tax on excess
For additional information on how to report pension or annuity
payments on your federal income tax return, be sure to review the
instructions on the back of Copies B and C of the Form 1099-R
that you received and the instructions for lines 16a and 16b of Form
1040 (lines 12a and 12b of Form 1040A).
What is not covered in this publication?
The following topics are not discussed in this publication.
- The General Rule. This is the method generally
used to determine the tax treatment of pension and annuity income from
nonqualified plans (including commercial annuities). For a qualified
plan, you generally cannot use the General Rule unless your annuity
starting date is before November 19, 1996. Although this publication
will help you determine whether you can use the General Rule, it will
not help you use it to determine the tax treatment of your pension or
annuity income. For more information on the General Rule, see
General Rule for Pensions and
- Individual retirement annuity contracts. These
are annuity contracts issued by an insurance company that follow IRA
rules. See Publication 590,
Individual Retirement Arrangements
- Civil service retirement benefits. If you are
retired from the federal government (either regular or disability
retirement) or are the survivor or beneficiary of a federal employee
or retiree who died, get Publication 721,
Tax Guide to U.S. Civil
Service Retirement Benefits. Publication 721
covers the tax
treatment of federal retirement benefits, primarily those paid under
the Civil Service Retirement System (CSRS) or the Federal Employees'
Retirement System (FERS).
- Social security and equivalent tier 1 railroad
retirement benefits. For information about the tax treatment of
these benefits, see Publication 915,
Social Security and
Equivalent Railroad Retirement Benefits. However, this
publication (575) covers the tax treatment of nonequivalent tier 1
railroad retirement benefits, tier 2 benefits, vested dual benefits,
and supplemental annuity benefits paid by the U.S. Railroad Retirement
- Tax-sheltered annuity plans (403(b) plans). If
you work for a public school or certain tax-exempt organizations, you
may be eligible to participate in a 403(b) retirement plan offered by
your employer. Although this publication covers the treatment of
benefits under 403(b) plans, it does not cover other tax provisions
that apply to these plans. For more information on 403(b) plans, see
Tax-Sheltered Annuity Plans (403(b)
Help from IRS.
You can get help from the employee plans taxpayer assistance
telephone service between the hours of 1:30 p.m. and 3:30 p.m. Eastern
Time, Monday through Thursday, at (202) 283-9516.
(This is not a toll-free number.)
Comments and suggestions.
We welcome your comments about this publication and your
suggestions for future editions.
You can e-mail us while visiting our web site at www.irs.gov.
You can write to us at the following address:
Internal Revenue Service
Technical Publications Branch
1111 Constitution Ave. NW
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be
helpful if you would include your daytime phone number, including the
area code, in your correspondence.