Designated Roth accounts. For tax years beginning after 2005, a 401(k) or 403(b) plan can include a qualified Roth contribution program. Under that program, designated Roth contributions are treated as elective deferrals, except that the contributions are included in income. A qualified distribution from a Roth account is not includible in income. Generally, you cannot have a qualified distribution within the 5-tax-year period beginning with the first tax year for which the participant made a designated Roth contribution to the plan. Therefore, for designated Roth contributions made in 2006, the first year for which a qualified distribution can be made is 2011.

Qualified reservist distributions. The additional 10% tax on early distributions does not apply to a qualified reservist distribution. See Qualified reservist distributions under Tax on Early Distributions, for more information.

Public safety employees. After August 17, 2006, the additional 10% tax on early distributions does not apply to distributions from qualified governmental plans, if you were a public safety employee who separated from service after you reached age 50. See Qualified public safety employees under Tax on Early Distributions, for more information.

Rollovers by nonspouse beneficiary. For distributions after 2006, a nonspouse designated beneficiary may have a distribution from an eligible retirement plan of a deceased employee directly transferred (trustee-to-trustee) to his or her own IRA set up to receive the distribution. The transfer will be treated as an eligible rollover distribution and the receiving plan will be treated as an inherited IRA. See Rollovers by nonspouse beneficiary under Rollovers, for more information.

Retired public safety officers. For distributions after 2006, an eligible retired public safety officer can elect to exclude from income distributions of up to $3,000 made directly from an eligible retirement plan to the provider of accident, health, or long-term care insurance. See Insurance Premiums for Public Safety Officers under General Information, for more information.

Hurricane tax relief. Special rules apply to the use of retirement funds by qualified individuals who suffered an economic loss as a result of Hurricane Katrina, Rita, or Wilma. See Hurricane-Related Relief, for information on these special rules.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

This publication discusses 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).