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I sent a personal check to Arizona State Retirement System to purchase back some forfeited years of service. This was an after tax check and not withheld from my pay. Is it deductible and if so, where can I enter it? It will be taxed when I receive my retirement paychecks.
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This is not deductible on your tax return, but you shouldn't pay tax on the portion of your retirement that represents your net after tax purchases. In most cases, your 1099-R will reflect this number but I would keep good records of your own to be sure. You would adjust this when you report the income in the year that you receive it.
My husband retired from the state and bought more time too. The plan will keep track of it and when you take a distribution or pension part of it will come out tax free. It will be allocated. No it won't be taxable on your 1099R.
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