Publication 721 - Introductory Material
Catch-up contributions to Thrift Savings Plan (TSP). Participants in the TSP who are age 50 or older at the end of the year generally can make catch-up contributions to the plan.
For 2007 and for
2008, the maximum catch-up contribution is $5,000.
Rollovers by nonspouse beneficiary. Beginning in 2007, a nonspouse designated beneficiary may have a distribution from the Civil Service Retirement System (CSRS),
Retirement System (FERS), or TSP of a deceased employee or retiree 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 in Part II under Rollover Rules, for more information.
Retired public safety officer. Beginning in 2007, an eligible retired public safety officer can elect to exclude from income distributions of up to $3,000
made directly from the
CSRS or FERS to the provider of accident, health, or long-term care insurance. See Distributions Used To Pay Insurance Premiums for Public Safety
Officers in Part II for more information.
Rollovers to Roth IRAs. After 2007, you can roll over distributions directly from the CSRS, FERS, and TSP to a Roth IRA if, for the tax year of the
modified adjusted gross income for Roth IRA purposes is not more than $100,000, and your filing status is not married filing
Rollovers to Roth IRAs in Part II 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 in Publication 575, Pension and Annuity Income, for information on these special rules.
Rollovers. You can roll over certain amounts from the CSRS, FERS, or TSP, to a tax-sheltered annuity plan (403(b) plan) or a state or
local government section
457 deferred compensation plan. See Rollover Rules in Part II.
Rollovers by surviving spouse. You may be able to roll over a distribution you receive as the surviving spouse of a deceased employee or retiree into a qualified
or a traditional IRA. See Rollover Rules in Part II.
Benefits for public safety officer's survivors. A survivor annuity received by the spouse, former spouse, or child of a public safety officer killed in the line of duty generally
will be excluded
from the recipient's income. For more information, see Dependents of public safety officers in Part IV.
Uniformed services Thrift Savings Plan (TSP) accounts. If you have a uniformed services TSP account, it may include contributions from combat zone pay. This pay is tax-exempt and
attributable to that pay are tax-exempt when they are distributed from the uniformed services TSP account. However, any earnings
contributions are subject to tax when they are distributed. The statement you receive from the TSP will separately state the
total amount of your
distribution and the amount of your taxable distribution for the year. If you have both a civilian and a uniformed services
TSP account, you should
apply the rules discussed in this publication separately to each account. You can get more information from the TSP website,
www.tsp.gov, or the TSP Service Office.
Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of
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 explains how the federal income tax rules apply to civil service retirement benefits received by retired
(including those disabled) or their survivors. These benefits are paid primarily under the Civil Service Retirement System
(CSRS) or the Federal
Employees' Retirement System (FERS).
Tax rules for annuity benefits.
Part of the annuity benefits you receive is a tax-free recovery of your contributions to the CSRS or FERS. The rest
of your benefits is taxable. If
your annuity starting date is after November 18, 1996, you must use the Simplified Method to figure the taxable and tax-free
parts. If your annuity
starting date is before November 19, 1996, you generally could have chosen to use the Simplified Method or the General Rule.
See Part II, Rules
Thrift Savings Plan.
The Thrift Savings Plan (TSP) provides federal employees with the same savings and tax benefits that many private
employers offer their employees.
This plan is similar to private sector 401(k) plans. You can defer tax on part of your pay by having it contributed to your
account in the plan. The
contributions and earnings on them are not taxed until they are distributed to you. See Thrift Savings Plan
in Part II.
Comments and suggestions.
We welcome your comments about this publication and your suggestions for future editions.
You can write to us at the following address:
Internal Revenue Service
Individual Forms and Publications Branch
1111 Constitution Ave. NW, IR-6526
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
You can email us at
. (The asterisk must be included in the
address.) Please put “Publications Comment
” on the subject line. Although we cannot respond individually to each email, we do appreciate your
feedback and will consider your comments as we revise our tax products.
Ordering forms and publications.
to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response
within 10 days after your request is received.
National Distribution Center
P.O. Box 8903
Bloomington, IL 61702-8903
If you have a tax question, check the information available on
or call 1-800-829-1040. We cannot answer tax questions sent to
either of the above addresses.
Useful Items - You may want to see:
Credit for the Elderly or the Disabled
Pension and Annuity Income
Individual Retirement Arrangements (IRAs)
General Rule for Pensions and Annuities
Form (and Instructions)
Statement of Annuity Paid
Statement of Survivor Annuity Paid
Withholding Certificate for Pension or Annuity Payments
Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts
See How To Get Tax Help near the end of this publication for information about getting publications and forms.