I receive a CSF 1099R form from OPM after I filed my taxes. This was a Code 4 death benefit that I thought was not taxable when I received it.

[MargaretL · Accepted solution]

The OPM distribution is taxable, although not the entire amount.  Code 4 is not relevant in determining how much is taxable, unfortunately.  It is the employee contributions amount in box 9b that will determine how much of the OPM withdrawal is taxable.

Please be sure to enter OPM 1099-R as CSF1099-R (as a survivor) and not as a regular 1099-R. The program will guide you through questions on OPM distribution:

1. Federal Taxes

2. Wages & Income

3. Scroll down and select IRA, 401(k), Pension Plans. On the screen Tell Us Which 1099-R you Have please be sure to select  CSF-1099-R Civil Service survivor annuity. Select Continue and you will see automatically filled in information on OPM. Select Continue again and you will see Enter Annuity Information screen. You will be prompted to data entry and additional questions about your annuity. Please be sure to enter all information – including your contributions- exactly as it appears on the form. This will ensure proper calculation of the taxable amount.

[Christie9881]

Hi- I have a CSR 1099R. The gross distribution amount (1) and taxable amount (4) is $585. 9b is  blank- $0. I also thought this did not have to pay taxes on this. Can you clarify if I pay taxes on it and should enter it?

[JulieS]

Yes, you should file this with your tax return. In most cases, part or all, will be taxable to you.

Although most things you inherit are not taxable, this is a distribution from a tax-deferred retirement account. It is fully or partially taxable at the time the funds are distributed. 

[Kanaloa]

Hello MargaretL I am assisting my mother in law on her taxes and through a divorce decree she has been getting half of her ex's OPM retirement since 1992 and has always paid taxes on the gross distribution amount which I'm not sure was correct. Her ex passed away in 2018 and she received a CSF 1099R for tax year 2019 with a taxable amount of Unknown. I'm a little confused when using the Simplified Worksheet Method because it asks if this was the first year she received this. Is the death benefit the same as the annuity she was receiving for the last 28 years for calculation purposes on the Simplified Method? 

[kbouf]

Margaret or others...do you know if this same OPM distribution is tax exempt in the state of MASSACHUSETTS.  Trying to help mom with her taxed and she has a survivor benefit OPM pension from the Post Office. 

[kbouf]

do you happen to know if an OPM pension from the Post Office is considered all or partially tax exempt in the state of MA?  What I found so far is very confusing.

[MarilynG1]

Per Expert @ColeenD3:

"While there is nothing from MA state that directly references OPM pensions, they do remark:

All retirement plan contributions and distributions that are excluded from federal gross income are also excluded from Massachusetts income for the plans below. See this LINK for details."