Should I claim pension as type "n' or type "p"?

[ppk3rd]

Confused by the type of pension I received from my employer. Is it type "p" or type "n"

[DoninGA · Accepted solution]

Whether you should claim your pension as type "N" or type "P" depends on the source of your pension and, specifically in the context of Michigan state tax, whether it is a private or other type of taxable income.

Based on tax return preparation guidance:

• Choose Type P (Private/Other): This is generally used for private pensions, annuities, and IRAs.
• Choose Type N (Other): In contexts like Michigan tax returns, this is often used for other distributions that are taxable but do not fit into the specific categories of Military (M), Railroad (R), Government/Public (G), or Private (P).

Key Considerations:

• Source Matters: If your pension is from a private employer, "P" is typically correct.
• Michigan Specifics: If you are filing a Michigan tax return, selecting the correct letter is critical for applying for pension exemptions on Form 4884.
• 1099-R Code: If you are looking at your Form 1099-R, Code 7 (Normal Distribution) often aligns with type "P," while other codes might require "N