Pension Plan

[J70RnmGK]

Civil Service (OPM) Form CSA-1099-R; Block 1 has Gross Distribution, Block 2a has Taxable Amount (UNKNOWN).  Do I assume the Gross  Distribution is Non-Taxable.

[SteamTrain]

No...it would be a very rare-to-non-existent possibility that none would be taxable.  It is far more likely that all of the gross is taxable.  But somewhat less of the gross would be taxable if you made after-tax contributions to the retirement plan.

Supposedly, there is enough information on the CSA-1099-R for you to go thru the calculations on a follow-up page...but I've never dealt with them myself...nor know how it is to be done.  Someone else may know better.

[ColeenD3 · Accepted solution]

No. You do not assume that. Civil Service pensions usually have an investment.

Plan cost: 

Box 9b. For a life annuity from a qualified plan or from a section 403(b) plan (with after-tax contributions), an amount may be shown for the employee’s total investment in the contract. It is used to compute the taxable part of the distribution. See Pub. 575

If you have using the simplified method since you began taking the pension, then you have recovered amounts each year. You would need to look back in your records.

The Simplified Method

Generally, if you begin receiving annuity payments from a qualified retirement plan, you use the Simplified Method to figure the tax-free part of the payments. A qualified retirement plan is a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity plan or contract (refer to Publication 575 for definitions). Under the Simplified Method, you figure the taxable and tax-free parts of your annuity payments by completing the Simplified Method Worksheet in the Form 1040 Instructions or in Publication 575. For more information on the Simplified Method, refer to Publication 575, or if you receive United States Civil Service retirement benefits, refer to Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits