It depends. The taxable amount of the pension is dependent on whether there are any 'after-tax' contributions.
- If your employer paid the money into the plan all of it is taxable.
- If you paid only pre-tax dollars into the pension all of it is taxable.
- If you had both pre-tax dollars and after-tax dollars then some of it may not be taxable.
- If you have no knowledge of any after-tax dollars in the plan and you are unable to find information about that all of it is taxable.
The taxability of the pension is based on one of the items above. If you believe you have contributed after-tax dollars then you must figure out the amount you did contribute to the pension with funds that you were unable to deduct. This is what is referred to as 'after-tax' dollars. Once you figure out this amount you will use either the Simplified Method or the General Rule to figure out the taxable amount.
Also, because box 2b Taxable amount not determined is marked, see Taxation of Periodic Payments IRS Publication 575.
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