How do you figure out what percentage of NYCERS contributions are taxable?

[psa188]

NYCERS says "Non-414(h) Contributions were deducted from your paychecks after tax, and are therefore not subject to taxation a second time. The portion of your retirement benefit that represents Non-414(h) Contributions is exempt from Federal taxes."

So how do you determine how much of your pension payment is taxable?

[KeshaH]

You'll need to know how much of your pension represents after-tax contributions. This is usually reported in box 9b of the 1099-R (total employee contribution). With this information, you can calculate the taxable portion of your pension using the Simplified Method.

The Simplified Method uses your after tax contributions (your cost) and a life expectancy table to determine how much each of your expected payments would be taxable.

[psa188]

Noted thanks, If I die, what does my wife do?

[LindaS5247]

When a NYCERS member dies and their spouse inherits their benefit, the surviving spouse will receive the deceased member's accumulated contributions, which are taxable as part of the death benefit, and the spouse can choose to roll over the funds into an IRA or other retirement account. 

In addition, if she chooses to roll over to an IRA, she will be able to treat the IRA as her own or as an inherited IRA.

After-tax contributions to NYCERS, also known as non-414(h) contributions, are not subject to taxation a second time when paid out to a surviving spouse, as they were already taxed when deducted from the member's paycheck. 

Click here for additional NYCERS information.  See page 3 under Payments after death of the participant, if you are a surviving spouse.

Click here for "NYCERS Survivor Benefits"

Click here for "PROCESSING DEATH BENEFITS NYCERS"

{Edited 03/11/2025|08:33 AM PST}

@psa188