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            Department of the Treasury                   Contents
            Internal Revenue Service
                                                         Reminders     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1
                                                         Introduction    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2
Publication 721
Cat. No. 46713C                                          Part I General Information              . . . . . . . . . . . . . . . . . . .   3
                                                         Part II Rules for Retirees              . . . . . . . . . . . . . . . . . . . . 5
                                                         Part III Rules for Disability Retirement and 
Tax Guide to
                                                         Credit for the Elderly or the Disabled . . . . . . .                            18
                                                         Part IV Rules for Survivors of Federal 
U.S. Civil                                               Employees . . . . . . . . . . . . . . . . . . . . . . . . . . .                 20
                                                         Part V Rules for Survivors of Federal Retirees . . .                            25
Service
                                                         Worksheets A and B . . . . . . . . . . . . . . . . . . . . . . .                28
                                                         How To Get Tax Help           . . . . . . . . . . . . . . . . . . . . . .       29
Retirement
                                                         Index   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     33

Benefits

For use in preparing                                     Reminders
                                                         Qualified disaster distributions.                 The additional tax on 
2022 Returns                                             early distributions doesn't apply to qualified disaster distri-
                                                         butions,  including  2020  coronavirus-related  distributions. 
                                                         See  Forms  8915-C,  8915-D,  and  8915-F,  as  applicable, 
                                                         for more details.
                                                         Extended rollover period for qualified plan loan off-
                                                         sets in 2018 or later.        For distributions made in tax years 
                                                         beginning  after  December  31,  2017,  you  have  until  the 
                                                         due date (including extensions) for your tax return for the 
                                                         tax year in which the offset occurs to roll over a qualified 
                                                         plan  loan  offset  amount.  For  more  information,  see                   Plan 
                                                         loan  offset  under     Time  for  making  rollover  in  Pub.  575, 
                                                         Pension and Annuity Income.
                                                         Maximum  age  for  traditional  IRA  contributions.                           The 
                                                         age  restriction  for  contributions  to  a  traditional  IRA  has 
                                                         been eliminated.
                                                         Withdrawals  in  the  case  of  a  birth  or  adoption  of  a 
                                                         child.  The 10% additional tax on early distributions does 
                                                         not apply to qualified birth or adoption distributions.
                                                         Increase in age for mandatory distributions.                          Individu-
                                                         als that reach age 70 /  on January 1, 2020, or later may 1 2
                                                         delay  distributions  until  April  1  of  the  year  following  the 
                                                         year in which they turn age 72.
                                                         Phased  retirement.           The  phased  retirement  program 
                                                         was signed into law by the Moving Ahead for Progress in 
                                                         the 21st Century Act. This program allows eligible employ-
                                                         ees  to  begin  receiving  annuity  payments  while  working 
                                                         part time. For more information about phased retirement, 
                                                         go to OPM.gov and click on the Retirement tab and then 
                                                         Phased  Retirement.  For  information  on  how  the  tax-free 
                                                         portion  (recovery  of  investment  in  the  contract)  of  your 
                                                         phased retirement benefits is figured, see Notice 2016-39, 
                                                         available at IRS.gov/irb/2016-26_IRB#NOT-2016-39.
Get forms and other information faster and easier at:    For  additional  guidance,  see  the  Benefits  Administra-
• IRS.gov (English)    • IRS.gov/Korean (한국어)            tion  Letter  19-102,  dated  May  20,  2019,  available  at 
• IRS.gov/Spanish (Español)  • IRS.gov/Russian (Pусский) OPM.gov/retirement-services/publications-forms/benefits-
• IRS.gov/Chinese (中文) • IRS.gov/Vietnamese (Tiếng Việt) 
                                                         administration-letters/2019/19-102.pdf.

Jan 19, 2023

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Expanded exception to the tax on early distributions See Roth TSP balance, discussed later, to get more infor-
from a governmental plan for qualified public safety mation about Roth contributions. The statement you re-
employees. For tax years beginning after December 31, ceive from the TSP will separately state the total amount
2015, in addition to those employees described in Quali- of your distribution and the amount of your taxable distri-
fied public safety employees under Tax on Early Distribu- bution for the year. If you have both a civilian and a uni-
tions in Pub. 575, the definition is expanded to include the formed services TSP account, you should apply the rules
following. discussed in this publication separately to each account.
You can get more information from the TSP website,
• Federal law enforcement officers.
TSP.gov, or the TSP Service Office.
• Federal customs and border protection officers. Photographs of missing children. The IRS is a proud
• Federal firefighters. partner with the National Center for Missing & Exploited
Children® (NCMEC). Photographs of missing children se-
• Air traffic controllers.
lected by the Center may appear in this publication on pa-
• Nuclear materials couriers. ges that would otherwise be blank. You can help bring
• Members of the U.S. Capitol Police. these children home by looking at the photographs and
calling 1-800-THE-LOST (1-800-843-5678) if you recog-
• Members of the Supreme Court Police. nize a child.
• Diplomatic security special agents of the U.S. Depart- Future developments. For the latest information about
ment of State. developments related to Pub. 721, such as legislation
In addition, the exception to the tax is extended to distri- enacted after it was published, go to IRS.gov/Pub721.
butions from governmental defined contribution plans, as
well as governmental defined benefit plans.
See Tax on Early Distributions in Pub. 575 for more in- Introduction
formation.
Roth Thrift Savings Plan (TSP) balance. You may be This publication explains how the federal income tax rules
able to contribute to a designated Roth account through apply to civil service retirement benefits received by re-
the TSP known as the Roth TSP. Roth TSP contributions tired federal employees (including those disabled) or their
are after-tax contributions, subject to the same contribu- survivors. These benefits are paid primarily under the Civil
tion limits as the traditional TSP. Qualified distributions Service Retirement System (CSRS) or the Federal Em-
from a Roth TSP aren't included in your income. See Thrift ployees' Retirement System (FERS).

Savings Plan in Part II for more information. Tax rules for annuity benefits. Part of the annuity ben-
Rollovers. You can roll over certain amounts from the efits you receive is a tax-free recovery of your contribu-
CSRS, FERS, or TSP to a qualified retirement plan or an tions to the CSRS or FERS. The rest of your annuity bene-
IRA. See Rollover Rules in Part II. fits are taxable. If your annuity starting date is after
Rollovers by surviving spouse. You may be able to roll November 18, 1996, you must use the Simplified Method
over a distribution you receive as the surviving spouse of to figure the taxable and tax-free parts. If your annuity
a deceased employee or retiree into a qualified retirement starting date is before November 19, 1996, you generally
plan or an IRA. See Rollover Rules in Part II. could have chosen to use the Simplified Method or the
Thrift Savings Plan (TSP) beneficiary participant ac- General Rule. See Part II, Rules for Retirees.

counts. If you are the spouse beneficiary of a decedent's Thrift Savings Plan (TSP). The TSP provides federal
TSP account, you have the option of leaving the death employees with the same savings and tax benefits that
benefit payment in a TSP account in your own name (a many private employers offer their employees. This plan is
beneficiary participant account). The amounts in the ben- similar to 401(k) plans offered by the private sector. You
eficiary participant account are neither taxable nor report- can defer tax on part of your pay by having it contributed
able until you choose to make a withdrawal, or otherwise to your traditional balance in the plan. The contributions
receive a distribution from the account. and earnings on them aren't taxed until they are distrib-
Benefits for public safety officer's survivors. A survi- uted to you. Also, the TSP offers a Roth TSP option. Con-
vor annuity received by the spouse, former spouse, or tributions to this type of balance are after tax, and quali-
child of a public safety officer killed in the line of duty will fied distributions from the account are tax free. See Thrift
generally be excluded from the recipient's income. For Savings Plan in Part II.
more information, see Dependents of public safety offi-
cers in Part IV. Comments and suggestions. We welcome your com-
Uniformed services Thrift Savings Plan (TSP) ac- ments about this publication and suggestions for future
counts. If you have a uniformed services TSP account, it editions.
may include contributions from combat pay. This pay is You can send us comments through IRS.gov/
tax exempt and contributions attributable to that pay are FormComments. Or, you can write to the Internal Reve-
tax exempt when they are distributed from the uniformed nue Service, Tax Forms and Publications, 1111 Constitu-
services TSP account. However, any earnings on those tion Ave. NW, IR-6526, Washington, DC 20224.
contributions are subject to tax when they are distributed.

Page 2 Publication 721 (2022)

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Although  we  can’t  respond  individually  to  each  com-                                     Refund of Contributions
ment received, we do appreciate your feedback and will 
consider  your  comments  and  suggestions  as  we  revise                                     If you leave federal government service or transfer to a job 
our tax forms, instructions, and publications.                                     Don’t send  not under the CSRS or FERS and you aren't eligible for an 
tax questions, tax returns, or payments to the above ad-                                       immediate annuity, you can choose to receive a refund of 
dress.                                                                                         the  money  in  your  CSRS  or  FERS  retirement  account. 
Getting answers to your tax questions.                                             If you have The refund will include both regular and voluntary contri-
a tax question not answered by this publication or the How                                     butions you made to the fund, plus any interest payable.
To Get Tax Help section at the end of this publication, go                                     If the refund includes only your contributions, none of 
to  the  IRS  Interactive  Tax  Assistant  page  at                                IRS.gov/    the refund is taxable. If it includes any interest, the interest 
Help/ITA  where  you  can  find  topics  by  using  the  search                                is taxable unless you roll it over directly into another quali-
feature or viewing the categories listed.                                                      fied plan or a traditional individual retirement arrangement 
Getting  tax  forms,  instructions,  and  publications.                                        (IRA). If you don't have the Office of Personnel Manage-
Go to IRS.gov/Forms to download current and prior-year                                         ment (OPM) transfer the interest to an IRA or other plan in 
forms, instructions, and publications.                                                         a direct rollover, tax will be withheld at a 20% rate. See 
                                                                                               Rollover Rules in Part II for information on how to make a 
Ordering tax forms, instructions, and publications.                                            rollover.
Go to IRS.gov/OrderForms to order current forms, instruc-
tions,  and  publications;  call  800-829-3676  to  order                                                Interest isn't paid on contributions to the CSRS for 
prior-year  forms  and  instructions.  The  IRS  will  process                                 TIP       service  after  1956  unless  your  service  was  for 
your order for forms and publications as soon as possible.                                               more  than  1  year  but  not  more  than  5  years. 
Don’t resubmit requests you’ve already sent us. You can                                        Therefore, many employees who withdraw their contribu-
get forms and publications faster online.                                                      tions under the CSRS don't get interest and don't owe any 
                                                                                               tax on their refund.
Useful Items
                                                                                               If you don't roll over interest included in your refund, it 
You may want to see:
                                                                                               may qualify as a lump-sum distribution eligible for capital 
                                                                                               gain treatment or the 10-year tax option. If you separate 
Publication
                                                                                               from service before the calendar year in which you reach 
  524   524 Credit for the Elderly or the Disabled                                             age 55, it may be subject to an additional 10% tax on early 
                                                                                               distributions. For more information, see Lump-Sum Distri-
  575   575 Pension and Annuity Income                                                         butions and Tax on Early Distributions in Pub. 575.
  590-A               590-A Contributions to Individual Retirement                                       A lump-sum distribution is eligible for capital gain 
        Arrangements (IRAs)                                                                    !         treatment or the 10-year tax option only if the plan 
  590-B               590-B Distributions from Individual Retirement                           CAUTION   participant was born before January 2, 1936.
        Arrangements (IRAs)
  939   939 General Rule for Pensions and Annuities                                            Tax Withholding and Estimated Tax

Form (and Instructions)                                                                        The CSRS or FERS annuity you receive is subject to fed-
                                                                                               eral  income  tax  withholding,  unless  you  choose  not  to 
  CSA 1099-R                                  CSA 1099-R Statement of Annuity Paid             have  tax  withheld.  OPM  will  tell  you  how  to  make  the 
  CSF 1099-R                       CSF 1099-R Statement of Survivor Annuity Paid               choice. The choice for no withholding remains in effect un-
                                                                                               til you change it. These withholding rules also apply to a 
  W-4P           W-4P Withholding Certificate for Pension or Annuity                           disability  annuity,  whether  received  before  or  after  mini-
        Payments                                                                               mum retirement age.
  1099-R                    1099-R Distributions From Pensions, Annuities,                     If you choose not to have tax withheld, or if you don't 
        Retirement or Profit-Sharing Plans, IRAs,                                              have enough tax withheld, you may have to make estima-
        Insurance Contracts, etc.                                                              ted tax payments.
  5329      5329 Additional Taxes on Qualified Plans (Including                                          You may owe a penalty if the total of your withheld 
        IRAs) and Other Tax-Favored Accounts                                                   !         tax  and  estimated  tax  doesn’t  cover  most  of  the 
                                                                                               CAUTION   tax shown on your return. Generally, you will owe 
                                                                                               the penalty for 2023 if the additional tax you must pay with 
                                                                                               your return is $1,000 or more and more than 10% of the 
Part I
                                                                                               tax to be shown on your 2023 return. For more informa-
General Information                                                                            tion,  including  exceptions  to  the  penalty,  see  Pub.  505, 
                                                                                               Tax Withholding and Estimated Tax.
This part of the publication contains information that can 
apply to most recipients of civil service retirement bene-                                     Form CSA 1099-R.    Form CSA 1099-R is mailed to you 
fits.                                                                                          by OPM each year. It will show any tax you had withheld. 

Publication 721 (2022)                                                                                                                      Page 3

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File a copy of Form CSA 1099-R with your tax return if any your traditional IRA or other qualified plan. If you have
federal income tax was withheld. OPM transfer (roll over) the interest directly to a Roth IRA,
the entire amount will be taxed in the current year. Be-
You can also view and download your Form CSA
cause no income tax will be withheld at the time of the
1099-R by visiting the OPM website at
transfer, you may want to increase your withholding or pay
servicesonline.opm.gov. To log in, you will need
estimated taxes. See Rollover Rules in Part II. If you re-
your retirement CSA claim number, your social security
ceive only your contributions, no tax will be withheld.
number, and your password.
Withholding from Thrift Savings Plan (TSP) pay-
Choosing no withholding on payments outside the ments. Generally, a distribution that you receive from the
United States. The choice for no withholding generally TSP is subject to federal income tax withholding. The
can't be made for annuity payments to be delivered out- amount withheld is:
side the United States and its possessions.
To choose no withholding if you are a U.S. citizen or • 20% if the distribution is an eligible rollover distribu-
tion;
resident alien, you must provide OPM with your home ad-
dress in the United States or its possessions. Otherwise, • 10% if it is a nonperiodic distribution other than an eli-
OPM has to withhold tax. For example, OPM must with- gible rollover distribution; or
hold if you provide a U.S. address for a nominee, trustee,
• An amount determined as if you were married with
or agent (such as a bank) to whom the benefits are to be
three withholding allowances, unless you submit a
delivered, but you don't provide your own U.S. home ad-
withholding certificate (Form W-4P), if it is a periodic
dress.
distribution.
If you don't provide a home address in the United
States or its possessions, you can choose not to have tax However, you can usually choose not to have tax withheld
withheld only if you certify to OPM that you aren't a U.S. from TSP payments other than eligible rollover distribu-
citizen, a U.S. resident alien, or someone who left the Uni- tions. By January 31 after the end of the year in which you
ted States to avoid tax. But if you so certify, you may be receive a distribution, the TSP will issue Form 1099-R
subject to the 30% flat rate withholding that applies to showing the total distributions you received in the prior
nonresident aliens. For details, see Pub. 519, U.S. Tax year and the amount of tax withheld.
Guide for Aliens. For a detailed discussion of withholding on distributions
from the TSP, see Important Tax Information About Pay-
Withholding certificate. If you give OPM a Form W-4P, ments From Your TSP Account, available from your
you can choose not to have tax withheld or you can agency personnel office or from the TSP.
choose to have tax withheld. The amount of tax withheld
The above document is also available in the
depends on your marital status, the number of withholding
“Forms & Publications” section of the TSP web-
allowances, and any additional amount you designate to
site at TSP.gov.
be withheld. If you don't make either of these choices,
OPM must withhold as if you were married with three with-
holding allowances. Estimated tax. Generally, you must make estimated tax
payments for 2023 if you expect to owe at least $1,000 in
To change the amount of tax withholding or to tax for 2023 (after subtracting your withholding and cred-
stop withholding, call OPM's Retirement Informa- its) and you expect your withholding and your credits to be
tion Office at 1-888-767-6738. No special form is less than the smaller of:
needed. You will need your retirement CSA or CSF claim
number and your social security number when you call. If • 90% of the tax to be shown on your income tax return
you have TTY/TDD equipment, call 1-855-887-4957. for 2023, or
• 100% of the tax shown on your 2022 income tax re-
You can also change the amount of withholding or turn (110% of that amount if the adjusted gross in-
stop withholding online by visiting the OPM web- come shown on the return was more than $150,000
site at servicesonline.opm.gov. You will need your ($75,000 if your filing status for 2023 will be married
retirement CSA or CSF claim number and password. If filing separately)). The return must cover all 12
you do not have a password, call or write OPM’s Retire- months.
ment Information Office.
You don't have to pay estimated tax for 2023 if you
were a U.S. citizen or resident alien for all of 2022 and you
Withholding from certain lump-sum payments. If you had no tax liability for the full 12-month 2022 tax year.
leave the federal government before becoming eligible to Pub. 505 and Form 1040-ES contain information that
retire and you apply for a refund of your CSRS or FERS you can use to help you figure your estimated tax pay-
contributions, or you die without leaving a survivor eligible ments.
for an annuity, you or your beneficiary will receive a distri-
bution of your contributions to the retirement plan plus any
interest payable. Tax will be withheld at a 20% rate on the Filing Requirements
interest distributed. However, tax will not be withheld if
you have OPM transfer (roll over) the interest directly to If your gross income, including the taxable part of your an-
nuity, is less than a certain amount, you generally don't

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have to file a federal income tax return for that year. The If you retired on disability before you reached your
gross income filing requirements for the tax year are in the TIP minimum retirement age, see Part III, Rules for
Instructions for Form 1040. Disability Retirement and Credit for the Elderly or
the Disabled. However, on the day after you reach your
Children. If you are the surviving spouse of a federal em- minimum retirement age, use the rules in this section to
ployee or retiree and your monthly annuity check includes report your disability retirement and begin recovering your
a survivor annuity for one or more children, each child's cost.
annuity counts as their own income (not yours) for federal
income tax purposes.
Annuity statement. The statement you received from
If your child can be claimed as a dependent, treat the
OPM when your CSRS or FERS annuity was approved
taxable part of their annuity as unearned income when ap-
shows the commencing date (the annuity starting date),
plying the filing requirements for dependents.
the gross monthly rate of your annuity benefit, and your to-
Form CSF 1099-R. Form CSF 1099-R will be mailed tal contributions to the retirement plan (your cost). You will
by January 31 after the end of each tax year. It will show use this information to figure the tax-free recovery of your
the total amount of the annuity you received in the past cost.
year. It should also show, separately, the survivor annuity
Annuity starting date. If you retire from federal gov-
for a child or children. Only the part that is each individu-
ernment service on a regular annuity, your annuity starting
al's survivor annuity should be shown on that individual's
date is the commencing date on your annuity statement
Form 1040 or 1040-SR.
from OPM. If something delays payment of your annuity,
If your Form CSF 1099-R doesn't separately show the
such as a late application for retirement, it doesn't affect
amount paid to you for a child or children, attach a state- the date your annuity begins to accrue or your annuity
ment to your return, along with a copy of Form CSF
starting date.
1099-R, explaining why the amount shown on the tax re-
turn differs from the amount shown on Form CSF 1099-R. Gross monthly rate. This is the amount you were to
get after any adjustment for electing a survivor's annuity or
You can also view and download your Form CSF
for electing the lump-sum payment under the alternative
1099-R by visiting the OPM website at
annuity option (if either applies) but before any deduction
servicesonline.opm.gov. To log in, you will need
for income tax withholding, insurance premiums, etc.
your retirement CSF claim number and password.
Your cost. Your monthly annuity payment contains an
You may request a Summary of Payments, show- amount on which you have previously paid income tax.
ing the amounts paid to you for your child(ren), This amount represents part of your contributions to the
from OPM by calling OPM's Retirement Informa- retirement plan. Even though you didn't receive the money
tion Office at 1-888-767-6738. You will need your CSF that was contributed to the plan, it was included in your
claim number and your social security number when you gross income for federal income tax purposes in the years
call. it was taken out of your pay.
The cost of your annuity is the total of your contribu-
Taxable part of annuity. To find the taxable part of a re- tions to the retirement plan, as shown on your annuity
tiree's annuity when applying the filing requirements, see statement from OPM. If you elected the alternative annuity
the discussion in Part II, Rules for Retirees, or Part III, option, it includes any deemed deposits and any deemed
Rules for Disability Retirement and Credit for the Elderly redeposits that were added to your lump-sum credit. (See
or the Disabled, whichever applies. To find the taxable Lump-sum credit under Alternative Annuity Option, later.)
part of each survivor annuity when applying the filing re- If you repaid contributions that you had withdrawn from
quirements, see the discussion in Part IV, Rules for Survi- the retirement plan earlier, or if you paid into the plan to
vors of Federal Employees, or Part V, Rules for Survivors receive full credit for service not subject to retirement de-
of Federal Retirees, whichever applies. ductions, the entire repayment, including any interest, is a
part of your cost. You can't claim an interest deduction for
any interest payments. You can't treat these payments as
voluntary contributions; they are considered regular em-
Part II
ployee contributions.

Rules for Retirees Recovering your cost tax free. How you figure the
tax-free recovery of the cost of your CSRS or FERS annu-
This part of the publication is for retirees who retired on
ity depends on your annuity starting date.
nondisability retirement.
• If your annuity starting date is before July 2, 1986, ei-
ther the 3-Year Rule or the General Rule(both dis-
cussed later) applies to your annuity.
• If your annuity starting date is after July 1, 1986, and
before November 19, 1996, you could have chosen to
use either the General Rule or the Simplified Method
(discussed later).

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• If your annuity starting date is after November 18, Simplified Method for as long as you receive your annuity.
1996, you must use the Simplified Method. If you chose a joint and survivor annuity, your survivor can
Under both the General Rule and the Simplified continue to take that same exclusion. The total exclusion
Method, each of your monthly annuity payments is made may be more than your cost.
up of two parts: the tax-free part that is a return of your
Deduction of unrecovered cost. If your annuity starting
cost, and the taxable part that is the amount of each pay-
date is after July 1, 1986, and the cost of your annuity
ment that is more than the part that represents your cost
hasn't been fully recovered at your (or the survivor annui-
(unless such payment is used for purposes discussed un-
tant's) death, a deduction is allowed for the unrecovered
der Distributions Used To Pay Insurance Premiums for
cost. The deduction is claimed on your (or your survivor's)
Public Safety Officers, later). The tax-free part is a fixed
final tax return as an “Other Itemized Deduction.” If your
dollar amount. It remains the same, even if your annuity is
annuity starting date is before July 2, 1986, no tax benefit
increased. Generally, this rule applies as long as you re-
is allowed for any unrecovered cost at death.
ceive your annuity. However, see Exclusion limit, later.

Choosing a survivor annuity after retirement. If Simplified Method
you retired without a survivor annuity and report your an-
nuity under the Simplified Method, don't change your If your annuity starting date is after November 18, 1996,
tax-free monthly amount even if you later choose a survi- you must use the Simplified Method to figure the tax-free
vor annuity. part of your CSRS or FERS annuity. (OPM has figured the
If you retired without a survivor annuity and report your taxable amount of your annuity shown on your Form CSA
annuity under the General Rule, you must figure the 1099-R using the Simplified Method.) You could have
tax-free part of your annuity using a new exclusion per- chosen to use either the Simplified Method or the General
centage if you later choose a survivor annuity and take re- Rule if your annuity starting date is after July 1, 1986, but
duced annuity payments. To figure the new exclusion per- before November 19, 1996. The Simplified Method
centage, reduce your cost by the amount you previously doesn't apply if your annuity starting date is before July 2,
recovered tax free. Figure the expected return as of the 1986.
date the reduced annuity begins. For details on the Gen-
eral Rule, see Pub. 939. Under the Simplified Method, you figure the tax-free
part of each full monthly payment by dividing your cost by
Canceling a survivor annuity after retirement. If a number of months based on your age. This number will
you retired with a survivor annuity payable to your spouse differ depending on whether your annuity starting date is
upon your death and you notify OPM that your marriage before November 19, 1996, or after November 18, 1996. If
has ended, your annuity might be increased to remove the your annuity starting date is after 1997 and your annuity
reduction for a survivor benefit. The increased annuity includes a survivor benefit for your spouse, this number is
doesn't change the cost recovery you figured at the annu- based on your combined ages.
ity starting date. The tax-free part of each annuity payment
remains the same. Worksheet A. Use Worksheet A (near the end of this
For more information about choosing or canceling publication) to figure your taxable annuity. Be sure to keep
a survivor annuity after retirement, contact OPM's the completed worksheet. It will help you figure your taxa-
Retirement Information Office at 1-888-767-6738. ble amounts for later years.
Instead of Worksheet A, you can generally use
Exclusion limit. Your annuity starting date determines TIP the Simplified Method Worksheet in the Instruc-
the total amount of annuity payments that you can exclude tions for Form 1040, or the Instructions for Form
from income over the years. 1040-NR, to figure your taxable annuity. However, you
must use Worksheet A and Worksheet B in this publica-
Annuity starting date after 1986. If your annuity tion if you chose the alternative annuity option, discussed
starting date is after 1986, the total amount of annuity in- later.
come that you (or the survivor annuitant) can exclude over
the years as a return of your cost can't exceed your total Line 2. See Your cost, earlier, for an explanation of
cost. Annuity payments you or your survivors receive after your cost in the plan. If your annuity starting date is after
the total cost in the plan has been recovered are generally November 18, 1996, and you chose the alternative annu-
fully taxable. ity option (explained later), you must reduce your cost by
the tax-free part of the lump-sum payment you received.
Example. Your annuity starting date is after 1986 and
you exclude $100 a month under the Simplified Method. If Line 3. The number you enter on line 3 is the appropri-
your cost is $12,000, the exclusion ends after 10 years ate number from Table 1 or 2 representing approximate
(120 months). Thereafter, your entire annuity is generally life expectancies in months. If your annuity starting date is
fully taxable. after 1997, use:
Annuity starting date before 1987. If your annuity • Table 1 for an annuity without a survivor benefit, or
starting date is before 1987, you can continue to take your • Table 2 for an annuity with a survivor benefit.
monthly exclusion figured under the General Rule or
If your annuity starting date is before 1998, use Table 1.

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Line 6. If you received contributions tax free before Under this rule, you excluded all the annuity payments
2022, the amount previously recovered tax free that you from income until you fully recovered your cost. After your
must enter on line 6 is the total amount from line 10 of last cost was recovered, all payments became fully taxable.
year's worksheet. If your annuity starting date is before You can't use another rule to again exclude amounts from
November 19, 1996, and you chose the alternative annu- income.
ity option, this amount includes the tax-free part of the
lump-sum payment you received. The 3-Year Rule was repealed for retirees whose annu-
ity starting date is after July 1, 1986.
Example. Bill Smith retired from the federal govern-
ment on March 31, 2022, under an annuity that will pro- Alternative Annuity Option
vide a survivor benefit for his wife, Kathy. His annuity
starting date is April 1, 2022, the annuity is paid in arrears, If you are eligible, you may choose an alternative form of
and he received his first monthly annuity payment on May annuity. If you make this choice, you will receive a
1, 2022. He must use the Simplified Method to figure the lump-sum payment equal to your contributions to the plan
tax-free part of his annuity benefits. and a reduced monthly annuity. You are eligible to make
Bill's monthly annuity benefit is $1,000. He had contrib- this choice if you meet all of the following requirements.
uted $31,000 to his retirement plan and had received no
distributions before his annuity starting date. At his annuity • You are retiring, but not on disability.
starting date, he was 65 and Kathy was 57. • You have a life-threatening illness or other critical
Bill's completed Worksheet A is shown later. To com- medical condition.
plete line 3, he used Table 2 at the bottom of the work-
sheet and found that 310 is the number in the second col- • You don't have a former spouse entitled to court-or-
dered benefits based on your service.
umn opposite the age range that includes 122 (his and
Kathy's combined ages). Bill keeps a copy of the comple- If you aren't eligible or don't choose this alternative an-
ted worksheet for his records. It will help him (and Kathy, if nuity, you can skip the following discussion and go to Fed-
she survives him) figure the taxable amount of the annuity eral Gift Tax, later.
in later years.
Bill's tax-free monthly amount is $100. (See line 4 of the Lump-Sum Payment
worksheet.) If he lives to collect more than 310 monthly
payments, he will generally have to include in his gross in- The lump-sum payment you receive under the alternative
come the full amount of any annuity payments received annuity option generally has a tax-free part and a taxable
after 310 payments have been made. part. The tax-free part represents part of your cost. The
If Bill doesn't live to collect 310 monthly payments and taxable part represents part of the earnings on your annu-
his wife begins to receive monthly payments, she will also ity contract. Your lump-sum credit (discussed later) may
exclude $100 from each monthly payment until 310 pay- include a deemed deposit or redeposit that is treated as
ments (Bill's and hers) have been collected. If she dies being included in your lump-sum payment even though
before 310 payments have been made, an “Other Item- you don’t actually receive such amounts. Deemed depos-
ized Deduction” will be allowed for the unrecovered cost its and redeposits, which are described later under
on her final income tax return. Lump-sum credit, are taxable to you in the year of retire-
ment. Your taxable amount may therefore be more than
General Rule the lump-sum payment you receive.

If your annuity starting date is after November 18, 1996, You must include the taxable part of the lump-sum pay-
you can't use the General Rule to figure the tax-free part ment in your income for the year you receive the payment
of your CSRS or FERS annuity. If your annuity starting unless you roll it over into another qualified plan or an IRA.
date is after July 1, 1986, but before November 19, 1996, If you don't have OPM transfer the taxable amount to an
you could have chosen to use either the General Rule or IRA or other plan in a direct rollover, tax will be withheld at
the Simplified Method. If your annuity starting date is be- a 20% rate. See Rollover Rules, later, for information on
fore July 2, 1986, you could have chosen to use the Gen- how to make a rollover.
eral Rule only if you couldn't use the 3-Year Rule. OPM can make a direct rollover only up to the
Under the General Rule, you figure the tax-free part of ! amount of the lump-sum payment. Therefore, to
each full monthly payment by multiplying the initial gross CAUTION defer tax on the full taxable amount if it is more
monthly rate of your annuity by an exclusion percentage. than the payment, you must add funds from another
Figuring this percentage is complex and requires the use source.
of actuarial tables. For these tables and other information
about using the General Rule, see Pub. 939. The taxable part of the lump-sum payment doesn't
qualify as a lump-sum distribution eligible for capital gain
3-Year Rule treatment or the 10-year tax option. It may also be subject
to an additional 10% tax on early distributions if you sepa-
If your annuity starting date was before July 2, 1986, you rate from service before the calendar year in which you
probably had to report your annuity using the 3-Year Rule. reach age 55, even if you reach age 55 in the year you

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Worksheet A. Simplified Method for Bill Smith                                                         Keep for Your Records
See the instructions in Part II of this publication under Simplified Method.
1. Enter the total pension or annuity payments received this year. Also, add this amount to the total for Form 1040, 
    1040-SR, or 1040-NR, line 5a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                1.  $ 8,000
2. Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion.  See * Your cost in Part 
    II, Rules for Retirees, earlier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         2.    31,000
    Note. If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 
    and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or 
    annuity has changed). Otherwise, go to line 3.
3. Enter the appropriate number from Table 1 below. But if your annuity starting date was after 1997 and the 
    payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below . . . . .                                                        3.    310
4. Divide line 2 by the number on line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  4.    100
5. Multiply line 4 by the number of months for which this year's payments were made. If your annuity starting date 
    was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Otherwise, go 
    to line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.    800
6. Enter any amounts previously recovered tax free in years after 1986. This is the amount shown on line 10 of 
    your worksheet for last year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            6.    0
7. Subtract line 6 from line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          7.    31,000
8. Enter the smaller of line 5 or line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                8.    800
9. Taxable amount for year. Subtract line 8 from line 1. Enter the result, but not less than zero. Also, add this 
    amount to the total for Form 1040 or 1040-SR, line 5b. If you are a nonresident alien, enter this amount on line 1 
    of Worksheet C. If your Form CSA 1099-R or Form CSF 1099-R shows a larger amount, use the amount figured 
    on this line instead. If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums 
    for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 . . . . . .                                                     9.  $ 7,200
10. Was your annuity starting date before 1987? 
             STOP
        Yes.      Don't complete the rest of this worksheet.
     
       No. Add lines 6 and 8. This is the amount you have recovered tax free through 2022. You will need this 
    number if you need to fill out this worksheet next year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         10.   800
11. Balance of cost to be recovered. Subtract line 10 from line 2. If zero, you will not have to complete this 
    worksheet next year. The payments you receive next year will generally be fully taxable . . . . . . . . . . . . . . . . . .                                               11. $ 30,200

                                                  Table 1 for Line 3 Above
                                                                          AND your annuity starting date was—
    IF your age on your                                     before November 19, 1996,                 after November 18, 1996, 
    annuity starting date was . . .                         THEN enter on line 3 . . .                THEN enter on line 3 . . .
    55 or under                                                           300                                                                                                 360
    56–60                                                                 260                                                                                                 310
    61–65                                                                 240                                                                                                 260
    66–70                                                                 170                                                                                                 210
    71 or over                                                            120                                                                                                 160
                                                  Table 2 for Line 3 Above
    IF the annuitants' combined 
    ages on your annuity starting 
    date were . . .                                         THEN enter on line 3 . . .
    110 or under                                                          410
    111–120                                                               360
    121–130                                                               310
    131–140                                                               260
    141 or over                                                           210

* A death benefit exclusion of up to $5,000 applies to certain benefits received by survivors of employees who died 
before August 21, 1996.

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receive the lump-sum payment. For more information, see           to receive a lump-sum payment of that amount under the 
Lump-Sum Distributions and Tax on Early Distributions in          alternative annuity option. The present value of his annuity 
Pub. 575.                                                         contract is $155,000.
                                                                  The tax-free part and the taxable part of the lump-sum 
Worksheet  B. Use   Worksheet  B  (near  the  end  of  this       payment are figured using                                                             Worksheet B, as shown below. 
publication)  to  figure  the  taxable  part  of  your  lump-sum  The taxable part ($24,800) is also his net cost in the plan, 
payment.  Be  sure  to  keep  the  completed  worksheet  for      which is used to figure the taxable part of his reduced an-
your records.                                                     nuity payments. See Reduced Annuity, later.
To complete the worksheet, you will need to know the 
amount of your lump-sum credit and the present value of           Lump-sum payment in installments.                                                                If you choose the 
your annuity contract.                                            alternative  annuity  option,  you  will  usually  receive  the 
                                                                  lump-sum  payment  in  one  installment.  The  overall  tax 
Lump-sum credit.       Generally, this is the same amount 
                                                                  treatment is explained at the beginning of this discussion.
as  the  lump-sum  payment  you  receive  (the  total  of  your 
contributions to the retirement system). However, for pur-        How  to  report. Add  any  actual  or  deemed  payment  of 
poses  of  the  alternative  annuity  option,  your  lump-sum     your lump-sum credit (defined earlier) to the total for Form 
credit may also include deemed deposits and redeposits            1040,  1040-SR,  or  1040-NR,  line  5a.  Add  the  taxable 
that  OPM  advanced  to  your  retirement  account  so  that      amount to the total for Form 1040, 1040-SR, or 1040-NR, 
you  are  given  credit  for  the  service  they  represent.      line 5b, unless you roll over the taxable part to your tradi-
Deemed deposits (including interest) are for federal em-          tional IRA or a qualified retirement plan.
ployment  during  which  no  retirement  contributions  were 
taken out of your pay. Deemed redeposits (including inter-
                                                                  Reduced Annuity
est)  are  for  any  refunds  of  retirement  contributions  that 
you received and didn't repay. You are treated as if you 
                                                                  If you have chosen to receive a lump-sum payment under 
had received a lump-sum payment equal to the amount of 
                                                                  the  alternative  annuity  option,  you  will  also  receive  re-
your lump-sum credit and then had made a repayment to 
                                                                  duced  monthly  annuity  payments.  These  annuity  pay-
OPM of the advanced amounts.
                                                                  ments each will have a tax-free and a taxable part. To fig-
Present  value  of  your  annuity  contract.            The       ure  the  tax-free  part  of  each  annuity  payment,  you  must 
present value of your annuity contract is figured using ac-       use the Simplified Method (Worksheet A). For instructions 
tuarial tables provided by the IRS.                               on how to complete the worksheet, see                                                            Worksheet A un-
                                                                  der Simplified Method, earlier.
   If  you  are  receiving  a  lump-sum  payment  under 
   the alternative annuity option, you can write to the 
                                                                  To complete Worksheet A, line 2, you must reduce your 
   address  below  to  find  out  the  present  value  of 
                                                                  cost in the plan by the tax-free part of the lump-sum pay-
your annuity contract.
                                                                  ment  you  received.  Enter  as  your  net  cost  on  line  2  the 
   Internal Revenue Service                                       amount  from  Worksheet  B,  line  5.  Don't  include  the 
   Attn: Actuarial Group 2                                        tax-free part of the lump-sum payment with other amounts 
   TE/GE SE:T:EP:RA:T:A2                                          recovered  tax  free  (Worksheet  A,  line  6)  when  limiting 
   NCA-629                                                        your total exclusion to your total cost.
   1111 Constitution Ave. NW
                                                                  Example. The  facts  are  the  same  as  in  the                                                   example 
   Washington, DC 20224-0002
                                                                  for David Brown in the preceding discussion. In addition, 
                                                                  David  received  10  annuity  payments  in  2022  of  $1,200 
                                                                  each.  Using  Worksheet  A,  he  figures  the  taxable  part  of 
Example.      David  Brown  retired  from  the  federal  gov-     his annuity payments. He completes line 2 by reducing his 
ernment  in  2022,  one  month  after  his  55th  birthday.  He   $31,000 cost by the $6,200 tax-free part of his lump-sum 
had contributed $31,000 to his retirement plan and chose          payment. His entry on line 2 is his $24,800 net cost in the 

Worksheet B. Lump-Sum Payment for David Brown
              See the instructions in Part II of this publication 
              under Alternative Annuity Option.                                                 Keep for Your Records

1. Enter your lump-sum credit (your cost in the plan at the annuity starting date) . . . . . . . . . . . . . . . . .                                    1.         $ 31,000
2. Enter the present value of your annuity contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     2.           155,000
3. Divide line 1 by line 2  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3.           0.20
4. Tax-free amount. Multiply line 1 by line 3. (Caution: Don't include this amount on line 6 of 
   Worksheet A in this publication.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            4.         $ 6,200
5. Taxable amount (net cost in the plan). Subtract line 4 from line 1. Include this amount in the total 
   on Form 1040, 1040-SR, or 1040-NR, line 5b. Also, enter this amount on line 2 of Worksheet A in 
   this publication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.         $ 24,800

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plan (the amount from Worksheet B, line 5). He doesn't in- contributions that were deducted from your salary. They
clude the tax-free part of his lump-sum payment on Work- also include the regular contributions withheld from your
sheet A, line 6. An example of David's filled-in Worksheet salary after you have the years of service necessary for
A is shown in this publication. the maximum annuity allowed by law. Voluntary contribu-
tions aren't the same as employee contributions to the
Reemployment after choosing the alternative
Thrift Savings Plan. See Thrift Savings Plan, later.
! annuity option. If you chose this option when
CAUTION you retired and then you were reemployed by the Additional annuity benefit. If you choose to receive
federal government before retiring again, your Form CSA an additional annuity benefit from your voluntary contribu-
1099-R may show only the amount of your contributions to tions, it is treated separately from the annuity benefit that
your retirement plan during your reemployment. If the comes from the regular contributions deducted from your
amount on the form doesn't include all your contributions, salary. This separate treatment applies for figuring the
disregard it and use your total contributions to figure the amounts to be excluded from, and included in, gross in-
taxable part of your annuity payments. come. It doesn't matter that you receive only 1 monthly
check covering both benefits. Each year, you will receive
Annuity starting date before November 19, 1996. If a Form CSA 1099-R that will show how much of your total
your annuity starting date is before November 19, 1996, annuity received in the past year was from each type of
and you chose the alternative annuity option, the taxable benefit.
and tax-free parts of your lump-sum payment and your an- Figure the taxable and tax-free parts of your additional
nuity payments are figured using different rules. Under monthly benefits from voluntary contributions using the
those rules, you don't reduce your cost in the plan (Work- rules that apply to regular CSRS and FERS annuities, as
sheet A, line 2) by the tax-free part of the lump-sum pay- explained earlier.
ment. However, you must include that tax-free amount Refund of voluntary contributions. If you choose to
with other amounts previously recovered tax free (Work- receive a refund of your voluntary contributions plus ac-
sheet A, line 6) when limiting your total exclusion to your crued interest, the interest is taxable to you in the tax year
total cost. it is distributed unless you roll it over to a traditional IRA or
another qualified retirement plan. If you don't have OPM
Federal Gift Tax transfer the interest to a traditional IRA or other qualified
retirement plan in a direct rollover, tax will be withheld at a
If, through the exercise or nonexercise of an election or 20% rate. See Rollover Rules, later. The interest doesn't
option, you provide an annuity for your beneficiary at or af- qualify as a lump-sum distribution eligible for capital gain
ter your death, you have made a gift. The gift may be taxa- treatment or the 10-year tax option. It may also be subject
ble for gift tax purposes. The value of the gift is equal to to an additional 10% tax on early distributions if you sepa-
the value of the annuity. rate from service before the calendar year in which you
reach age 55. For more information, see Lump-Sum Dis-
Joint and survivor annuity. If the gift is an interest in a tributions and Tax on Early Distributions in Pub. 575.
joint and survivor annuity where only you and your spouse
can receive payments before the death of the last spouse Community property laws. State community property
to die, the gift will generally qualify for the unlimited marital laws apply to your annuity. These laws will affect your in-
deduction. This will eliminate any gift tax liability with re- come tax only if you file a return separately from your
gard to that gift. spouse.
If you provide survivor annuity benefits for someone Generally, the determination of whether your annuity is
other than your current spouse, such as your former separate income (taxable to you) or community income
spouse, the unlimited marital deduction will not apply. This (taxable to both you and your spouse) is based on your
may result in a taxable gift. marital status and domicile when you were working. Re-
gardless of whether you are now living in a community
More information. For information about the gift tax,
property state or a noncommunity property state, your cur-
see Form 709, United States Gift (and Generation-Skip-
rent annuity may be community income if it is based on
ping Transfer) Tax Return, and its instructions.
services you performed while married and domiciled in a
community property state.
Retirement During the Past Year At any time, you have only one domicile even though
you may have more than one home. Your domicile is your
If you have recently retired, the following discussions cov- fixed and permanent legal home that you intend to use for
ering annual leave, voluntary contributions, and commun- an indefinite or unlimited period, and to which, when ab-
ity property may apply to you. sent, you intend to return. The question of your domicile is
mainly a matter of your intentions as indicated by your ac-
Annual leave. A payment for accrued annual leave re- tions.
ceived on retirement is a salary payment. It is taxable as If your annuity is a mixture of community income and
wages in the tax year you receive it. separate income, you must divide it between the two
kinds of income. The division is based on your periods of
Voluntary contributions. Voluntary contributions to the
retirement fund are those made in addition to the regular

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Worksheet A. Simplified Method for David Brown                                                        Keep for Your Records
See the instructions in Part II of this publication under Simplified Method.
1. Enter the total pension or annuity payments received this year. Also, add this amount to the total for Form 1040, 
1040-SR, or 1040-NR, line 5a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                1.  $ 12,000
2. Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion.  See * Your cost in Part 
II, Rules for Retirees, earlier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         2.    24,800
Note. If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 
and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or 
annuity has changed). Otherwise, go to line 3.
3. Enter the appropriate number from Table 1 below. But if your annuity starting date was after 1997 and the 
payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below . . . . .                                                        3.    360
4. Divide line 2 by the number on line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              4.    68.89
5. Multiply line 4 by the number of months for which this year's payments were made. If your annuity starting date 
was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Otherwise, go 
to line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.    688.90
6. Enter any amounts previously recovered tax free in years after 1986. This is the amount shown on line 10 of 
your worksheet for last year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            6.    0
7. Subtract line 6 from line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      7.    24,800
8. Enter the smaller of line 5 or line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            8.    688.90
9. Taxable amount for year. Subtract line 8 from line 1. Enter the result, but not less than zero. Also, add this 
amount to the total for Form 1040 or 1040-SR, line 5b. If you are a nonresident alien, enter this amount on line 1 
of Worksheet C. If your Form CSA 1099-R or Form CSF 1099-R shows a larger amount, use the amount figured 
on this line instead. If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums 
for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 . . . . . .                                                     9.  $ 11,311.10
10. Was your annuity starting date before 1987? 
         STOP
      Yes.   Don't complete the rest of this worksheet.
 
     No. Add lines 6 and 8. This is the amount you have recovered tax free through 2022. You will need this 
number if you need to fill out this worksheet next year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         10.   688.90
11. Balance of cost to be recovered. Subtract line 10 from line 2. If zero, you will not have to complete this 
worksheet next year. The payments you receive next year will generally be fully taxable . . . . . . . . . . . . . . . . . .                                               11. $ 24,111.10

                                                Table 1 for Line 3 Above
                                                                      AND your annuity starting date was—
IF your age on your                                       before November 19, 1996,                   after November 18, 1996, 
annuity starting date was . . .                           THEN enter on line 3 . . .                  THEN enter on line 3 . . .
55 or under                                                           300                                                                                                 360
56–60                                                                 260                                                                                                 310
61–65                                                                 240                                                                                                 260
66–70                                                                 170                                                                                                 210
71 or over                                                            120                                                                                                 160
                                                Table 2 for Line 3 Above
IF the annuitants' combined 
ages on your annuity starting 
date were . . .                                           THEN enter on line 3 . . .
110 or under                                                          410
111–120                                                               360
121–130                                                               310
131–140                                                               260
141 or over                                                           210

* A death benefit exclusion of up to $5,000 applies to certain benefits received by survivors of employees who died be-
fore August 21, 1996.

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service and domicile in community and noncommunity Worksheet C. Limited Taxable
property states while you were married. Amount
For more information, see Pub. 555, Community Prop- for Nonresident Alien
erty.
Keep for Your Records
Reemployment After Retirement 1. Enter the otherwise taxable amount of
the CSRS or FERS annuity (from line 9
If you retired from federal service and are later rehired by of Worksheet A or from Form CSA
the federal government as an employee, you can continue 1099-R or CSF 1099-R) or TSP
to receive your annuity during reemployment. The em- distributions (from Form 1099-R) . . . . . 1.
ploying agency will usually pay you the difference be- 2. Enter the total U.S. Government basic
tween your salary for your period of reemployment and pay other than tax-exempt pay for
your annuity. This amount is taxable as wages. Your an- services performed outside the United
nuity will continue to be taxed just as it was before. If you States . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
are still recovering your cost, you continue to do so. If you 3. Enter the total U.S. Government basic
have recovered your cost, the annuity you receive while pay for all services . . . . . . . . . . . . . . . . . 3.
you are reemployed is generally fully taxable. 4. Divide line 2 by line 3 . . . . . . . . . . . . . . . 4.
5. Limited taxable amount. Multiply
Nonresident Aliens line 1 by line 4. Enter this amount on
Form 1040-NR, line 5b . . . . . . . . . . . . . . 5.
The following special rules apply to nonresident alien fed-
eral employees performing services outside the United Example 1. You are a nonresident alien who per-
States and to nonresident alien retirees and beneficiaries. formed all services for the U.S. Government abroad as a
A nonresident alien is an individual who isn't a citizen or a nonresident alien. You retired and began to receive a
resident alien of the United States. monthly annuity of $200. Your total basic pay for all serv-
ices for the U.S. Government was $100,000. All of your
Special rule for figuring your total contributions. basic pay was tax exempt because it wasn't U.S. source
Your contributions to the retirement plan (your cost) also income.
include the government's contributions to the plan to a The taxable amount of your annuity using Worksheet A
certain extent. You include government contributions that in this publication is $720. You are a nonresident alien, so
wouldn't have been taxable to you at the time they were you figure the limited taxable amount of your annuity using
contributed if they had been paid directly to you. For ex- Worksheet C as follows.
ample, government contributions wouldn't have been tax-
able to you if, at the time made, your services were per-
Worksheet C. Limited Taxable
formed outside the United States. Thus, your cost is
increased by these government contributions, and the Amount
benefits that you, or your beneficiary, must include in in- for Nonresident
come are reduced. Alien—Example 1
This method of figuring your total contributions doesn't Keep for Your Records
apply to any contributions the government made on your
1. Enter the otherwise taxable amount of
behalf after you became a citizen or a resident alien of the
the CSRS or FERS annuity (from line 9
United States.
of Worksheet A or from Form CSA
Limit on taxable amount. There is a limit on the taxable 1099-R or CSF 1099-R) or TSP
amount of payments received from the CSRS, the FERS, distributions (from Form 1099-R) . . . . . 1. $ 720
or the TSP by a nonresident alien retiree or nonresident 2. Enter the total U.S. Government basic
alien beneficiary. Figure this limited taxable amount by pay other than tax-exempt pay for
multiplying the otherwise taxable amount by a fraction. services performed outside the United
The numerator of the fraction is the retiree's total U.S. States . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. 0
Government basic pay, other than tax-exempt pay for 3. Enter the total U.S. Government basic
services performed outside the United States. The de- pay for all services . . . . . . . . . . . . . . . . . 3. 100,000
nominator is the retiree's total U.S. Government basic pay 4. Divide line 2 by line 3 . . . . . . . . . . . . . . . 4. 0
for all services. 5. Limited taxable amount. Multiply
Basic pay includes regular pay plus any standby differ- line 1 by line 4. Enter this amount on
ential. It doesn't include bonuses, overtime pay, certain Form 1040-NR, line 5b . . . . . . . . . . . . . . 5. 0
retroactive pay, uniform or other allowances, or lump-sum
leave payments. Example 2. You are a nonresident alien who per-
To figure the limited taxable amount of your CSRS or formed services for the U.S. Government as a nonresident
FERS annuity or your TSP distributions, use Worksheet C. alien both within the United States and abroad. You re-
(For an annuity, first complete Worksheet A in this publi- tired and began to receive a monthly annuity of $240.
cation.)

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Your total basic pay for your services for the U.S. Gov- • Made on or after the date you reach age 59 / , made 1 2
ernment was $120,000; $40,000 was for work done in the to a beneficiary or your estate on or after your death,
United States and $80,000 was for your work done in a or attributable to your being disabled.
foreign country. The part of your total basic pay for your For more information, go to the TSP website, TSP.gov,
work done in a foreign country was tax exempt because it or the TSP Service Office. See Pub. 575 for more informa-
wasn't U.S. source income. tion about designated Roth accounts.
The taxable amount of your annuity figured using Work-
sheet A in this publication is $1,980. You are a nonresi- Uniformed services TSP accounts. If you have a uni-
dent alien, so you figure the limited taxable amount of your formed services TSP account that includes contributions
annuity using Worksheet C as follows. from combat pay, the distributions attributable to those
contributions are tax exempt. However, any earnings on
those contributions to a traditional TSP balance are sub-
Worksheet C. Limited Taxable ject to tax when they are distributed. See Roth TSP bal-
Amount ance, discussed previously, to get more information about
for Nonresident Roth contributions. The statement you receive from the
Alien—Example 2 TSP will separately state the total amount of your distribu-
Keep for Your Records tion and the amount of your taxable distribution for the
year. You can get more information from the TSP website,
1. Enter the otherwise taxable amount of TSP.gov, or the TSP Service Office.
the CSRS or FERS annuity (from line 9
of Worksheet A or from Form CSA Direct rollover by the TSP. If you ask the TSP to trans-
1099-R or CSF 1099-R) or TSP fer any part of the money in your account, from traditional
distributions (from Form 1099-R) . . . . . 1. $ 1,980
contributions and earnings, to a traditional IRA or other
2. Enter the total U.S. Government basic qualified retirement plan, the tax on that part is deferred
pay other than tax-exempt pay for until you receive payments from the traditional IRA or
services performed outside the United other plan. However, see the following Note for a discus-
States . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. 40,000
sion on direct rollovers by the TSP of Roth contributions
3. Enter the total U.S. Government basic and earnings. Also, see Rollover Rules, later.
pay for all services . . . . . . . . . . . . . . . . . 3. 120,000
4. Divide line 2 by line 3 . . . . . . . . . . . . . . . 4. 0.333 Direct rollover by the TSP to a Roth IRA. If you ask the
TSP to transfer any part of the money in your account,
5. Limited taxable amount. Multiply
line 1 by line 4. Enter this amount on from traditional contributions and earnings, to a Roth IRA,
Form 1040-NR, line 5b . . . . . . . . . . . . . . 5. 659 the amount transferred will be taxed in the current year.
However, see the following Note for a discussion on direct
rollovers by the TSP of Roth contributions and earnings.
Thrift Savings Plan (TSP) Also, see Rollovers to Roth IRAs, later, for more informa-
tion.
Generally, all of the money in your TSP account is taxed
as ordinary income when you receive it. (However, see Note. A direct rollover of your Roth contributions and
Roth TSP balance and Uniformed services TSP accounts earnings in your TSP account if certain conditions are met
next.) This is because neither the contributions to your tra- (see Roth TSP balance, earlier) to a Roth 401(k), Roth
ditional TSP balance nor its earnings have been included 403(b), Roth 457(b), or Roth IRA aren't subject to tax
previously in your taxable income. The way that you with- when they are transferred or when you receive payments
draw your account balance determines when you must from those accounts at a later date. This is because you
pay the tax. already paid tax on those contributions. You can't roll over
Roth contributions and earnings in your TSP account to a
Roth TSP balance. The TSP also offers a Roth TSP op- traditional IRA.
tion, which allows you to make after-tax contributions into
your TSP account. This means Roth TSP contributions TSP annuity. If you ask the TSP to buy an annuity with
are included in your income. The contribution limits are the money in your account from traditional contributions
the same as the traditional TSP. You can elect to have and earnings, the annuity payments are taxed when you
part or all of your TSP contributions designated as a Roth receive them. The payments aren't subject to the addi-
TSP. Agency contributions will be part of your traditional tional 10% tax on early distributions, even if you are under
TSP balance. Also, you can't roll over any portion of your age 55 when they begin. However, there is no tax on the
traditional TSP into your Roth TSP. annuity payments if the annuity is purchased using the
Qualified distributions from your Roth TSP aren't inclu- money in your account from Roth contributions and earn-
ded in income. This applies to both your contributions to ings if certain conditions are met. See Roth TSP balance,
the account and income earned on that account. A quali- earlier. This is because you already paid tax on those con-
fied distribution is generally a distribution that is: tributions.

• Made after a 5-tax-year period of participation; and Cash withdrawals. If you withdraw any of the money in
your TSP account from traditional contributions and

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earnings, it is generally taxed as ordinary income when be deferred if you make a rollover contribution to a tradi-
you receive it unless you roll it over into a traditional IRA or tional IRA or other qualified plan equal to the declared dis-
other qualified plan. (See Rollover Rules, later.) If you re- tribution amount. See Rollover Rules, later.
ceive your entire TSP account balance in a single tax If you withdraw any money from your TSP account in
year, you may be able to use the 10-year tax option to fig- that same year, the TSP must withhold income tax of 20%
ure your tax. See Lump-Sum Distributions in Pub. 575 for of the total of the declared distribution and the amount
details. However, there is no tax if you withdraw money in withdrawn. However, no withholding is required for por-
your TSP account from Roth contributions and earnings if tions of the distribution that is from Roth contributions and
certain conditions are met. See Roth TSP balance, earlier. earnings if certain conditions are met. See Roth TSP bal-
ance, earlier.
To qualify for the 10-year tax option, the plan par-
! ticipant must have been born before January 2, More information. For more information about the TSP,
CAUTION 1936.
see Summary of the Thrift Savings Plan, a TSP publica-
If you receive a single payment or you choose to re- tion distributed to all federal employees. Also, see Impor-
ceive your account balance in monthly payments over a tant Tax Information About Payments From Your TSP Ac-
period of less than 10 years, the TSP must generally with- count, and Special Tax Withholding Rules for Thrift
hold 20% for federal income tax. If you choose to receive Savings Plan Payments to Nonresident Aliens, which are
your account balance in monthly payments over a period available from your agency personnel office or from the
of 10 or more years or a period based on your life expect- TSP by calling 1-TSP-YOU-FRST (1-877-968-3778), and
ancy, the payments are subject to withholding as if you for participants who are deaf, hard of hearing, or have a
are married with three withholding allowances, unless you speech disability, by dialing 711 from any telephone.
submit a withholding certificate. See also Withholding The above documents are also available on the
from Thrift Savings Plan payments, earlier, under Tax TSP website at TSP.gov. Select “Forms & Publi-
Withholding and Estimated Tax in Part I. However, there is cations.”
no withholding requirement for amounts withdrawn from
your TSP account that is from Roth contributions and
earnings if certain conditions are met. See Roth TSP bal- Rollover Rules
ance, earlier, for a discussion of those conditions.
If you withdraw cash or other assets from a qualified re-
Tax on early distributions. Any money paid to you tirement plan in an eligible rollover distribution, you can
from your TSP account before you reach age 59 / may 1 2
generally defer tax on the distribution by rolling it over to
be subject to an additional 10% tax on early distributions. another qualified retirement plan, a traditional IRA, or, af-
However, this additional tax doesn't apply in certain situa- ter 2 years of participation in a SIMPLE IRA sponsored by
tions, including any of the following. your employer, a SIMPLE IRA under that plan. You don't
• You receive the distribution and separate from gov- include the amount rolled over in your income, and you
ernment service during or after the calendar year in can't take a deduction for it. The amount rolled over is
which you reach age 55. taxed later as the new program pays that amount to you. If
• You choose to receive your account balance in sub- you roll over amounts into a traditional IRA, later distribu-
stantially equal payments (not less than yearly) based tions of these amounts from the traditional IRA don't qual-
on your life expectancy. ify for the capital gain or the 10-year tax option. However,
capital gain treatment or the 10-year tax option will be re-
• You are totally and permanently disabled. stored if the traditional IRA contains only amounts rolled
• You receive amounts from your Roth contributions over from a qualified plan and these amounts are rolled
that represent a return of your cost (after-tax money). over from the traditional IRA into a qualified retirement
The earnings may be subject to the 10% tax depend- plan.
ing on whether you met certain conditions. See Roth To qualify for the capital gain treatment or 10-year
TSP balance, earlier. ! tax option, the plan participant must have been
CAUTION born before January 2, 1936.
Note. Changes to the initial distribution method or
amount under the equal payment exception may result in You can also roll over a distribution from a qualified re-
a recapture tax. tirement plan into a Roth IRA. Although the transfer of a
For more information, see Tax on Early Distributions in distribution into a Roth IRA is considered a rollover for
Pub. 575. Roth IRA purposes, it isn't a tax-free transfer unless you
Outstanding loan. If the TSP declares a distribution from are rolling over amounts from Roth contributions and
your account because money you borrowed hasn't been earnings. See Rollovers to Roth IRAs, later, for more infor-
repaid when you separate from government service, your mation.

account is reduced and the amount of the distribution Rollovers to SIMPLE retirement accounts. You can
(your unpaid loan balance and any unpaid interest), from roll over amounts from a qualified retirement plan or an
traditional contributions and earnings, is taxed in the year IRA into a SIMPLE retirement account as follows.
declared. The distribution may also be subject to the addi-
tional 10% tax on early distributions. However, the tax will

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1. During the first 2 years of participation in a SIMPLE • Before you reach age 62 or normal retirement age,
retirement account, you may roll over amounts from whichever is later.
one SIMPLE retirement account into another SIMPLE The automatic rollover requirement applies if the distribu-
retirement account. tion is more than $1,000 and is an eligible rollover distribu-
2. After the first 2 years of participation in a SIMPLE re- tion. You can choose to have the distribution paid directly
tirement account, you may roll over amounts from a to you or rolled over directly to your traditional or Roth IRA
SIMPLE retirement account, a qualified retirement or another qualified retirement plan. If you don't make this
plan, or an IRA into a SIMPLE retirement account. choice, OPM will automatically roll over the distribution
into an IRA of a designated trustee or issuer.
Qualified retirement plan. For this purpose, a qualified
No tax withheld. If you choose the direct rollover op-
retirement plan is generally:
tion or have an automatic rollover, no tax will be withheld
• A qualified employee plan, from any part of the distribution that is directly paid to the
• A qualified employee annuity, trustee of the other plan. However, if the rollover is to a
Roth IRA, you may want to choose to have tax withheld
• A tax-sheltered annuity plan (403(b) plan), or because any amount rolled over is generally included in
• An eligible state or local government section 457 de- income. Any part of the eligible rollover distribution paid to
ferred compensation plan. you is subject to withholding at a 20% rate. Direct rollover
amounts from Roth contributions and earnings don't have
The CSRS, FERS, and TSP are considered qualified re-
tax withheld because you already paid tax on those
tirement plans.
amounts.
Distributions eligible for rollover treatment. If you re-
Payment to you option. If an eligible rollover distribution
ceive a refund of your CSRS or FERS contributions when
is paid to you, OPM or the TSP must withhold 20% for in-
you leave government service, you can roll over any inter-
come tax even if you plan to roll over the distribution to an-
est you receive on the contributions. You can't roll over
other qualified retirement plan, or traditional or Roth IRA.
any part of your CSRS or FERS annuity payments.
However, the full amount is treated as distributed to you
You can roll over a distribution of any part of your TSP
even though you actually receive only 80%. You must
account balance except:
generally include in income any part (including the part
1. A distribution of your account balance that you withheld) that you don't roll over within 60 days to another
choose to receive in (typically monthly, but not less qualified retirement plan or to a traditional IRA. Rollovers
frequently than annually) payments over: to Roth IRAs are generally included in income. Eligible
rollover distributions that are from Roth contributions don't
a. Your life expectancy,
have tax withheld because you already paid tax on those
b. The joint life expectancies of you and your benefi- amounts.
ciary, or If you leave government service before the calendar
c. A period of 10 years or more; year in which you reach age 55 and are under age 59 /1 2
when a distribution is paid to you, you may have to pay an
2. A required minimum distribution generally beginning additional 10% tax on any part, including any tax withheld,
at age 72; that you don't roll over. However, distributions from Roth
3. A declared distribution because of an unrepaid loan, if contributions will not be subject to the 10% additional tax
you haven't separated from government service (see because they are a return of your cost (after-tax money).
Outstanding loan under Thrift Savings Plan, earlier); Earnings from those contributions may be subject to the
or 10% additional tax if certain conditions aren't met. See
Roth TSP balance, earlier. Also, see Tax on Early Distri-
4. A hardship distribution. butions in Pub. 575.
In addition, a distribution to your beneficiary isn’t gener- Exception to withholding. Withholding from an eligi-
ally treated as an eligible rollover distribution. However, ble rollover distribution paid to you isn't required if the dis-
see Qualified domestic relations order (QDRO) Rollovers , tributions for your tax year total less than $200.
by surviving spouse, and Rollovers by nonspouse benefi-
ciary, later. Partial rollovers. A lump-sum distribution may qualify
for capital gain treatment or the 10-year tax option if the
Direct rollover option. You can choose to have OPM or plan participant was born before January 2, 1936. See
the TSP transfer any part of an eligible rollover distribution Lump-Sum Distributions in Pub. 575. However, if you roll
directly to another qualified retirement plan that accepts over any part of the distribution, the part you keep doesn't
rollover distributions or to a traditional IRA or Roth IRA. qualify for this special tax treatment.
There is an automatic rollover requirement for manda-
Rolling over more than amount received. If you
tory distributions. A mandatory distribution is a distribution
want to roll over more of an eligible rollover distribution
made:
than the amount you received after income tax was with-
• Without your consent; and held, you will have to add funds from some other source
(such as your savings or borrowed amounts).

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Example. You left government service at age 53. On Qualified domestic relations order (QDRO). You may
February 3, 2022, you receive an eligible rollover distribu- be able to roll over tax free all or part of a distribution you
tion of $10,000 from your TSP account, which is from tra- receive from the CSRS, the FERS, or the TSP under a
ditional contributions and earnings. The TSP withholds court order in a divorce or similar proceeding. You must
$2,000, so you actually receive $8,000. If you want to roll receive the distribution as the government employee's
over the entire $10,000 to postpone including that amount spouse or former spouse (not as a nonspousal benefi-
in your income, you will have to get $2,000 from some ciary). The rollover rules apply to you as if you were the
other source and add it to the $8,000 you actually re- employee. You can roll over the distribution if it is an eligi-
ceived. ble rollover distribution (described earlier) and it is made
If you roll over only $8,000, you must include in your in- under a QDRO or, for the TSP, a qualifying order.
come the $2,000 not rolled over. Also, you may be subject A QDRO or qualifying order is a judgment, decree, or
to the 10% additional tax on the $2,000. order relating to payment of child support, alimony, or
marital property rights. The payments must be made to a
Time for making rollover. You must generally complete spouse, former spouse, child, or other dependent of a par-
the rollover of an eligible rollover distribution paid to you ticipant in the plan.
by the 60th day following the day on which you receive the The order must contain certain information, including
distribution. the amount or percentage of the participant's benefits to
The IRS may waive the 60-day requirement where the be paid to each payee. It can't require the plan to pay ben-
failure to do so would be against equity or good con- efits in a form not offered by the plan, nor can it require the
science, such as in the event of a casualty, disaster, or plan to pay increased benefits.
other event beyond your reasonable control. There are A distribution that is paid to a child or dependent under
three ways to obtain a waiver of the 60-day requirement. a QDRO or a qualifying order is taxed to the plan partici-
• You qualify for an automatic waiver. pant.

• You self-certify that you met the requirements of a Rollovers by surviving spouse. You may be able to roll
waiver. over tax free all or part of the CSRS, FERS, or TSP distri-
• You request and receive a letter ruling under the ap- bution you receive as the surviving spouse of a deceased
propriate IRS Revenue Procedure. This Revenue Pro- employee or retiree. The rollover rules apply to you as if
cedure is generally published in the first Internal Reve- you were the employee or retiree. You can generally roll
nue Bulletin of the year. over the distribution into a qualified retirement plan or an
IRA. An amount rolled over to a Roth IRA isn't tax free un-
For more information about requesting a waiver of the less you are rolling over amounts from Roth contributions
60-day rollover requirement, rollovers permitted between and earnings. See Rollovers to Roth IRAs, later.
the various types of retirement plans (including IRAs), and A distribution paid to a beneficiary other than the em-
other topics regarding rollovers, see Rollovers in Pub. ployee's surviving spouse is generally not an eligible roll-
590-A. For information about the extended rollover period over distribution. However, see Rollovers by nonspouse
for a qualified plan loan offset, see Plan loan offset under beneficiary next.
Time for making rollover in Pub. 575.
A letter ruling isn't required if a financial institution re- Rollovers by nonspouse beneficiary. You may be able
ceives the rollover funds during the 60-day rollover period, to roll over tax free all or a portion of a distribution you re-
you follow all procedures required by the financial institu- ceive from the CSRS, FERS, or TSP of a deceased em-
tion, and, solely due to an error on the part of the financial ployee or retiree if you are a designated beneficiary (other
institution, the funds aren't deposited into an eligible retire- than a surviving spouse) of the employee or retiree. The
ment account within the 60-day rollover period. distribution must be a direct trustee-to-trustee transfer to
Frozen deposits. If an amount distributed to you be- your IRA that was set up to receive the distribution. The
comes a frozen deposit in a financial institution during the transfer will be treated as an eligible rollover distribution
60-day period after you receive it, the rollover period is ex- and the IRA will be treated as an inherited IRA. An amount
tended. An amount is a frozen deposit if you can't with- rolled over to a Roth IRA isn't tax free. See Rollovers to
draw it because of either: Roth IRAs, later. For information on inherited IRAs, see
Pub. 590-A.
• The bankruptcy or insolvency of the financial institu-
tion, or How to report. On your Form 1040, 1040-SR, or
1040-NR, report the total distributions from the CSRS,
• Any requirement imposed by the state in which the in-
FERS, or TSP on line 5a. Report the taxable amount of
stitution is located because of the bankruptcy or insol-
the distributions (total distribution less the amount rolled
vency (or threat of it) of one or more financial institu-
over) on line 5b. Also, enter “Rollover” next to line 5b.
tions in the state.
If the rollover was made to a Roth IRA, see Rollovers to
The 60-day rollover period is extended by the period for Roth IRAs, later, for reporting the rollover on your return.
which the amount is a frozen deposit and doesn't end ear-
lier than 10 days after the amount is no longer a frozen de- Written explanation to recipients. The TSP or OPM
posit. must provide a written explanation to you within a reason-
able period of time before making an eligible rollover

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distribution to you. It must tell you about all of the follow- and earnings. Report a rollover from a qualified retirement
ing. plan to a Roth IRA on Form 1040, 1040-SR, or 1040-NR,
• Your right to have the distribution paid tax free directly lines 5a and 5b.
to another qualified retirement plan or to a traditional Enter the total amount of the distribution before income
IRA. tax or deductions were withheld on Form 1040, 1040-SR,
or 1040-NR, line 5a. This amount is shown in box 1 of
• The requirement to withhold tax from the distribution, Form 1099-R. From this amount, subtract any contribu-
unless it is from your Roth contributions and earnings, tions (usually shown in box 5 of Form 1099-R) that were
if it isn't directly rolled over. taxable to you when made. From that result, subtract the
• The nontaxability of any part of the distribution that amount of any qualified rollover from a designated Roth
you roll over within 60 days after you receive the distri- account. Enter the remaining amount, even if zero, on
bution. Form 1040, 1040-SR, or 1040-NR, line 5b.
• Other qualified retirement plan rules that apply, includ- If you must include any amount in your income,
ing those for lump-sum distributions, alternate payees, ! you may have to increase your withholding or
and cash or deferred arrangements. CAUTION make estimated tax payments. See Pub. 505.

• How the distribution rules of the plan to which you roll
over the distribution may differ in their restrictions and Choosing the right option. Table 1 may help you de-
tax consequences from the rules that apply to the plan cide which distribution option to choose. Carefully com-
making the distribution. pare the effects of each option.

Note. Rollovers to Roth IRAs aren’t tax free and are inclu- Table 1. Comparison of Payment to You
ded in income unless it is from your Roth contributions Versus Direct Rollover
and earnings. See Rollovers to Roth IRAs, later.
Reasonable period of time. The TSP or OPM must Affected Result of a Payment to Result of a Direct
Item You Rollover
provide you with a written explanation no earlier than 90
days and no later than 30 days before the distribution is Withholding The payer must withhold There is no
made. However, you can choose to have the TSP or OPM 20% of the taxable part. withholding.
make a distribution less than 30 days after the explanation However, you may
is provided, as long as the following two requirements are want to choose
met. withholding on a
rollover from your
• You have the opportunity, for at least 30 days after the traditional
explanation is provided, to consider whether or not contributions and
you want to make a direct rollover. earnings to a Roth
• The information you receive clearly states that you IRA.
have the right to have 30 days to make a decision. Additional If you are under age 59 / , 1 2 There is no 10%
Contact the TSP or OPM if you have any questions about tax a 10% additional tax may additional tax. See
this information. apply to the taxable part Tax on early
(including an amount equal distributions,
to the tax withheld) that earlier.
Rollovers to Roth IRAs isn't rolled over.
You can roll over distributions directly from the CSRS, When to Any taxable part (including Any taxable part
FERS, and TSP to a Roth IRA. report as the taxable part of any isn't income to you
income amount withheld) not until later
You must include in your gross income distributions rolled over is income to distributed to you
from the CSRS, FERS, and TSP that you would have had you in the year paid. from the new plan
to include in income if you hadn't rolled them over into a or IRA. However,
Roth IRA. You don't include in gross income any part of a see Rollovers to
distribution that is a return of contributions that were taxa- Roth IRAs, earlier,
ble to you when paid. In addition, the 10% tax on early dis- for an exception.
tributions doesn't apply.
Any amount, which is from traditional TSP contributions Distributions Used To Pay Insurance
and earnings, rolled over to a Roth IRA is subject to the Premiums for Public Safety Officers
same rules for converting a traditional IRA into a Roth IRA.
For more information, see Converting From Any Tradi- If you are an eligible retired public safety officer (law en-
tional IRA Into a Roth IRA in chapter 1 of Pub. 590-A. forcement officer, firefighter, chaplain, or member of a res-
cue squad or ambulance crew), you can elect to exclude
How to report. A rollover to a Roth IRA isn't a tax-free from income distributions made from an eligible retirement
distribution unless you are rolling over after-tax plan that are used to pay the premiums for accident or
contributions you made such as your Roth contributions

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health insurance or long-term care insurance. The premi-
ums can be for coverage for you, your spouse, or depend-
ents. The distribution must be made directly from the plan Part III
to the insurance provider. You can exclude from income
Rules for Disability
the smaller of the amount of the insurance premiums or
$3,000. You can only make this election for amounts that Retirement and
would otherwise be included in your income. The amount
excluded from your income can't be used to claim a medi- Credit for the Elderly or
cal expense deduction.
the Disabled
For this purpose, an eligible retirement plan is a gov-
ernmental plan that is: This part of the publication is for federal employees and
• A qualified trust, retirees who receive disability benefits under the CSRS,
the FERS, or other federal programs. It also explains the
• A section 403(a) plan,
tax credit available to certain taxpayers because of age or
• A section 403(b) annuity, or disability.
• A section 457(b) plan.
The CSRS and FERS are considered eligible retirement Disability Annuity
plans.
If you retired on disability, the disability annuity you re-
How to report. If you make this election, reduce the oth- ceive from the CSRS or FERS is taxable as wages until
erwise taxable amount of your annuity by the amount ex- you reach minimum retirement age, as explained in this
cluded. The taxable annuity shown on Form CSA 1099-R section. However, beginning on the day after you reach
doesn't reflect this exclusion. Report your total distribu- minimum retirement age, your payments are treated as a
tions on Form 1040, 1040-SR, or 1040-NR, line 5a. Re- retirement annuity and you can begin to recover the cost
port the taxable amount on Form 1040, 1040-SR, or of your annuity under the rules discussed earlier in Part II,
1040-NR, line 5b. Enter “PSO” next to the appropriate line Rules for Retirees.
on which you report the taxable amount. If you find that you could have started your recovery in
If you are retired on disability and reporting your disabil- an earlier year for which you have already filed a return,
ity pension on line 1a of Form 1040, 1040-SR, or you can still start your recovery of contributions in that ear-
1040-NR, include only the taxable amount on that line and lier year. To do so, file an amended return for that year
enter “PSO” and the amount excluded on the dotted line and each succeeding year for which you have already
next to the applicable line. filed a return. Generally, an amended return for any year
must be filed within 3 years after the due date for filing
How To Report Benefits your original return for that year.

If you received annuity benefits that aren't fully taxable, re- Minimum retirement age. This is the age at which you
port the total received for the year on Form 1040, could first receive an annuity were you not disabled. This
1040-SR, or 1040-NR, line 5a. Also, include on that line is generally based on your age and length of service.
the total of any other pension plan payments (even if fully Retirement under the Civil Service Retirement
taxable, such as those from the TSP) that you received System (CSRS). In most cases, under the CSRS, the
during the year in addition to the annuity. Report the taxa- minimum combinations of age and service for retirement
ble amount of these total benefits on Form 1040, are:
1040-SR, or 1040-NR, line 5b. However, if you use Form
4972, Tax on Lump-Sum Distributions, to report the tax on • Age 55 with 30 years of service;
any amount, don't include that amount on line 5a or 5b. In- • Age 60 with 20 years of service;
stead, follow the Form 4972 instructions.
• Age 62 with 5 years of service; or
If you received only fully taxable payments from your
retirement, the TSP, or other pension plan, report on Form • For service as a law enforcement officer, firefighter,
nuclear materials courier, or air traffic controller, age
1040, 1040-SR, or 1040-NR, line 5b, the total received for
50 with 20 years of covered service.
the year (except for any amount reported on Form 4972).
No entry is required on Form 1040, 1040-SR, or 1040-NR, Retirement under the Federal Employees Retire-
line 5a. ment System (FERS). In most cases, the minimum age
for retirement under the FERS is between ages 55 and 57
with at least 10 years of service. With at least 5 years of
service, your minimum retirement age is age 62. Your
minimum retirement age with at least 10 years of service
is shown in Table 2.

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Table 2. FERS Minimum Retirement Age                                 Terrorist attack. Disability payments for injuries incurred 
          (MRA) With 10 Years of Service                             as a direct result of a terrorist attack directed against the 
                                                                     United States (or its allies) aren't included in income. For 
IF you were born in. . .                  THEN your MRA is. . .      more information about payments to survivors of terrorist 
                                                                     attacks, see Pub. 3920, Tax Relief for Victims of Terrorist 
1947 or earlier . . . . . . . . . . . .   55 years.
                                                                     Attacks.
1948. . . . . . . . . . . . . . . . . . . 55 years, 2 months.
1949. . . . . . . . . . . . . . . . . . . 55 years, 4 months.        Military actions. Disability payments for injuries incurred 
1950. . . . . . . . . . . . . . . . . . . 55 years, 6 months.        as a direct result of a military action involving the Armed 
1951. . . . . . . . . . . . . . . . . . . 55 years, 8 months.        Forces  of  the  United  States  and  resulting  from  actual  or 
1952. . . . . . . . . . . . . . . . . . . 55 years, 10 months.       threatened  violence  or  aggression  against  the  United 
1953 to 1964. . . . . . . . . . . . .     56 years.                  States or any of its allies aren't included in income.

1965. . . . . . . . . . . . . . . . . . . 56 years, 2 months.        Disability  resulting  from  military  service  injuries.  If 
1966. . . . . . . . . . . . . . . . . . . 56 years, 4 months.        you received tax-exempt benefits from the Department of 
1967. . . . . . . . . . . . . . . . . . . 56 years, 6 months.        Veterans Affairs for personal injuries resulting from active 
1968. . . . . . . . . . . . . . . . . . . 56 years, 8 months.        service  in  the  U.S.  Armed  Forces  and  later  receive  a 
1969. . . . . . . . . . . . . . . . . . . 56 years, 10 months.       CSRS or FERS disability annuity for disability arising from 
1970 or later . . . . . . . . . . . . . . 57 years.                  the same injuries, you can't treat the disability annuity pay-
                                                                     ments  as  tax-exempt  income.  They  are  subject  to  the 
For  service  as  a  law  enforcement  officer,  member  of          rules described earlier under Disability Annuity.
the  Capitol  or  Supreme  Court  Police,  firefighter,  nuclear 
materials courier, or air traffic controller, the minimum re-        Payment for unused annual leave.     If you retire on disa-
tirement age is age 50 with 20 years of covered service or           bility, any payment for your unused annual leave is taxed 
any age with 25 years of covered service.                            as wages in the tax year you receive the payment.

How to report.      You must report all your disability annuity      Credit for the Elderly or the Disabled
payments  received  before  minimum  retirement  age  on 
Form 1040, 1040-SR, or Form 1040-NR, line 1a. Disability             You can take the credit for the elderly or the disabled if:
annuity  payments  received  after  you  reach  that  age  are 
reported  as  discussed  under            How  To  Report  Benefits, • You are a qualified individual, and
earlier in Part II.                                                  • Your income isn't more than certain limits.

Withholding.      For  income  tax  withholding  purposes,  a        You are a qualified individual for this credit if you are a 
disability annuity is treated the same as a nondisability an-        U.S.  citizen  or  resident  alien  and,  at  the  end  of  the  tax 
nuity.  This  treatment  also  applies  to  disability  payments     year, you are:
received  before  minimum  retirement  age  even  though 
these payments are shown as wages on your return. See                1. Age 65 or older; or
Tax Withholding and Estimated Tax in Part I.                         2. Under age 65, retired on permanent and total disabil-
                                                                       ity, and:
Other Benefits                                                         a. Received taxable disability income, and
The tax treatment of certain other benefits is explained in            b. Didn't reach mandatory retirement age (defined 
this section.                                                          later) before the tax year.
Federal  Employees'  Compensation  Act  (FECA).                      You are retired on permanent and total disability if:
FECA payments you receive for personal injuries or sick-             • You were permanently and totally disabled when you 
ness resulting from the performance of your duties are like            retired, and
workers'  compensation.  They  are  tax  exempt  and  aren't 
treated  as  disability  income  or  annuities.  However,  pay-      • You retired on disability before the close of the tax 
ments you receive while your claim is being processed, in-             year.
cluding pay while on sick leave and continuation of pay for 
                                                                     Even if you don't retire formally, you may be considered 
up to 45 days, are taxable.
                                                                     retired on disability when you have stopped working be-
Sick pay or disability payments repaid.             If you repay     cause of your disability.
sick leave or disability annuity payments you received and 
included in income in an earlier year to be eligible for non-        Permanently  and  totally  disabled. You  are  perma-
taxable  FECA  benefits  for  that  period,  you  can’t  deduct      nently and totally disabled if you can't engage in any sub-
the amount you repay.                                                stantial gainful activity because of your physical or mental 
If you repay sick leave or disability annuity payments in            condition. A physician must certify that the condition has 
the same year you receive them, the repayment reduces                lasted  or  can  be  expected  to  last  continuously  for  12 
your taxable sick leave pay or disability annuity.                   months or more, or that the condition can be expected to 
                                                                     result  in  death.  See  Physician's  statement,  next. 

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Substantial gainful activity is the performance of signifi- traumatic injury sustained in the line of duty. The death
cant duties over a reasonable period of time while working benefit isn't includible in the decedent's gross estate for
for pay or profit, or in work generally done for pay or profit. federal estate tax purposes or the survivor's gross income
for federal income tax purposes.
Physician's statement. If you are under age 65, you A public safety officer is a law enforcement officer, fire-
must have your physician complete a statement certifying fighter, or member of a public rescue squad or ambulance
that you were permanently and totally disabled on the crew. In certain circumstances, a chaplain killed in the line
date you retired. You must keep this statement for your of duty is also a public safety officer. The chaplain must
tax records. For this purpose, you can use the Physician's have been responding to a fire, rescue, or police emer-
Statement in the Instructions for Schedule R (Form 1040). gency as a member or employee of a fire or police depart-
ment.
Mandatory retirement age. This is the age set by your
This program can pay survivors an emergency interim
employer at which you would have had to retire if you
benefit of up to $3,000 if it finds that the death of the pub-
hadn't become disabled. There is no mandatory retire-
lic safety officer is one for which a final benefit will proba-
ment age for most federal employees. However, there is a
bly be paid. If there is no final payment, the recipient of the
mandatory retirement age for the following federal em-
interim benefit is liable for repayment. However, the BJA
ployees.
may not require all or part of the repayment if it will cause
• Air traffic controllers appointed after May 15, 1972, by a hardship. If that happens, that amount is tax free.
the Department of Transportation or the Department
For more information on this program, you may
of Defense must generally retire by the last day of the
contact the BJA by calling 1-888-744-6513.
month when they reach age 56.
• Federal firefighters, law enforcement officers, nuclear
Additional information about this program is also
materials couriers, or members of the Capitol or Su-
available on the BJA website at BJA.gov.
preme Court Police who are otherwise eligible for im-
mediate retirement must generally retire by the last
day of the month they reach age 57 or, if later, com-
plete 20 years of service. FERS Death Benefit

Figuring the credit. If you figure the credit yourself, first You may be entitled to a special FERS death benefit if you
fill out the front of Schedule R (Form 1040). Next, fill out were the spouse of an active FERS employee who died
Part III of the schedule. after at least 18 months of federal service. At your option,
If you want the IRS to figure your tax and credits, in- you can take the benefit in the form of a single payment or
cluding the credit for the elderly or the disabled, see the in the form of a special annuity payable over a 3-year pe-
Instructions for Schedule R (Form 1040). riod.
More information. For detailed information about this The tax treatment of the special death benefit depends
credit, see Pub. 524, Credit for the Elderly or the Disabled. on the option you choose and whether a FERS survivor
annuity is also paid.
If you choose the single payment option, use the follow-
Part IV ing rules.
• If a FERS survivor annuity isn't paid, at least part of
Rules for Survivors the special death benefit is tax free. The tax-free part
of Federal Employees is an amount equal to the employee's FERS contribu-
tions.
This part of the publication is for survivors of federal em- • If a FERS survivor annuity is also paid, all of the spe-
ployees. It explains how to treat amounts you receive be- cial death benefit is taxable. You can't allocate any of
cause of the employee's death. If you are the survivor of a the employee's FERS contributions to the special
federal retiree, see Part V. death benefit.
Employee earnings. Salary or wages earned by a fed- If you choose the 3-year annuity option, at least part of
eral employee but paid to the employee's survivor or ben- each monthly payment is tax free. Use the following rules.
eficiary after the employee's death are income in respect • If a FERS survivor annuity isn't paid, the tax-free part
of the decedent. This income is taxable to the survivor or of each monthly payment is an amount equal to the
beneficiary. This treatment also applies to payments for employee's FERS contributions divided by 36.
accrued annual leave.
• If a FERS survivor annuity is also paid, allocate the
Dependents of public safety officers. The Public employee's FERS contributions between the 3-year
Safety Officers' Benefits program, administered through annuity and the survivor annuity. Make the allocation
the Bureau of Justice Assistance (BJA), provides a in the same proportion that the expected return from
tax-free death benefit to eligible survivors of public safety each annuity bears to the total expected return from
officers whose death is the direct and proximate result of a both annuities. Divide the amount allocated to the

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3-year annuity by 36. The result is the tax-free part of to allocate the monthly exclusion among the beneficiaries
each monthly payment of the 3-year annuity. correctly.
Figure the total monthly exclusion for all beneficiaries
CSRS or FERS Survivor Annuity by completing lines 2 through 4 of Worksheet A as if only
the surviving spouse received an annuity. Then, to figure
If you receive a CSRS or FERS survivor annuity, you can the monthly exclusion for each beneficiary, multiply line 4
recover the employee's cost tax free. The employee's cost of the worksheet by a fraction. For any beneficiary, the nu-
is the total of the retirement plan contributions that were merator of the fraction is that beneficiary's monthly annu-
taken out of their pay. ity, and the denominator is the total of the monthly annuity
payments to all the beneficiaries.
How you figure the tax-free recovery of the cost de- The temporary annuity is payable to the child until the
pends on your annuity starting date. This is the day after child reaches a specified age in the plan, which can't be
the date of the employee's death. The methods to use are older than 25. The ending of a child's temporary annuity
the same as those described near the beginning of Part II doesn't affect the total monthly exclusion figured under
under Recovering your cost tax free. the Simplified Method. The total exclusion merely needs
to be reallocated at that time among the remaining benefi-
The following discussions cover only the Simplified ciaries. If only the surviving spouse is left drawing an an-
Method. You can use this method if your annuity starting nuity, the surviving spouse is entitled to the entire monthly
date is after July 1, 1986. You must use this method if exclusion as figured in the worksheet.
your annuity starting date is after November 18, 1996. Un-
der the Simplified Method, each of your monthly annuity Example. The facts are the same as in the example
payments is made up of two parts: the tax-free part that is for Diane Green in the preceding discussion, except that
a return of the employee's cost and the taxable part that is the Greens had a son, Robert, who was age 15 at the time
the amount of each payment that is more than the part of his father's death. Robert is entitled to a
that represents the employee's cost. The tax-free part re- $500-per-month temporary annuity until he reaches age
mains the same, even if your annuity is increased. How- 18 (age 22, if he remains a full-time student and doesn't
ever, see Exclusion limit, later. marry), as specified by the plan.
In completing Worksheet A (not shown), Diane fills out
Surviving spouse with no children receiving annui- the entries through line 4 exactly as shown in the filled-in
ties. Under the Simplified Method, you figure the tax-free worksheet for the earlier example. That is, she includes on
part of each full monthly annuity payment by dividing the line 1 only the amount of the annuity she herself received
employee's cost by a number of months based on your and she uses on line 3 the 360 factor for her age. After ar-
age. This number will differ depending on whether your riving at the $100 monthly exclusion on line 4, however,
annuity starting date is before November 19, 1996, or af- Diane allocates it between her own annuity and that of her
ter November 18, 1996. To use the Simplified Method, son.
complete Worksheet A. Specific instructions for Work- To find how much of the monthly exclusion to allocate
sheet A are given in Part II under Simplified Method. to her own annuity, Diane multiplies the $100 monthly ex-
clusion by the fraction $1,500 (her monthly annuity) over
Example. Diane Green, age 48, began receiving a $2,000 (the total of her $1,500 and Robert's $500 annui-
$1,500 monthly CSRS annuity in March 2022 upon the ties). She enters the result, $75, just below the entry
death of her husband. Her husband was a federal em- space for line 4. She completes the worksheet by entering
ployee when he died. She received 10 payments in 2022. $750 on lines 5 and 8, and $14,250 on line 9.
Her husband had contributed $36,000 to the retirement A second Worksheet A (not shown) is completed for
plan. Robert's annuity. On line 1, he enters $5,000 as the total
Diane must use the Simplified Method. Her completed annuity received. Lines 2, 3, and 4 are the same as those
Worksheet A is shown later. To complete line 3, she used on his mother's worksheet. In allocating the $100 monthly
Table 1 at the bottom of the worksheet and found that 360 exclusion on line 4 to his annuity, Robert multiplies it by
is the number in the last column opposite the age range the fraction $500 over $2,000. His resulting monthly exclu-
that includes her age. Diane keeps a copy of the comple- sion is $25. His exclusion for the year (line 8) is $250, and
ted worksheet for her records. It will help her figure her his taxable annuity for the year (line 9) is $4,750.
taxable annuity in later years. Diane and Robert only need to complete lines 10 and
Diane's tax-free monthly amount is $100 (line 4 of her 11 on a single worksheet to keep track of their unrecov-
worksheet). If she lives to collect more than 360 pay- ered cost for next year. These lines are exactly as shown
ments, the payments after the 360th will be fully taxable. If in the filled-in Worksheet A for the earlier example.
she dies before 360 payments have been made, an When Robert's temporary annuity ends, the computa-
“Other Itemized Deduction” will be allowed for the unrec- tion of the total monthly exclusion will not change. The
overed cost on her final income tax return. only difference will be that Diane will then claim the full ex-
clusion against her annuity alone.
Surviving spouse with child. If the survivor benefits in-
clude both a life annuity for the surviving spouse and one Surviving child only. A method similar to the Simplified
or more temporary annuities for the employee's children, Method can also be used to figure the taxable and nontax-
an additional step is needed under the Simplified Method able parts of a temporary annuity for a surviving child

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Worksheet A. Simplified Method for Diane Green                                                        Keep for Your Records
See the instructions in Part II of this publication under Simplified Method.
1. Enter the total pension or annuity payments received this year. Also, add this amount to the total for Form 1040, 
1040-SR, or 1040-NR, line 5a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                1.  $ 15,000
2. Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion.  See * Your cost in Part 
II, Rules for Retirees, earlier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         2.    36,000
Note. If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 
and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or 
annuity has changed). Otherwise, go to line 3.
3. Enter the appropriate number from Table 1 below. But if your annuity starting date was after 1997 and the 
payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below . . . . .                                                        3.    360
4. Divide line 2 by the number on line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              4.    100
5. Multiply line 4 by the number of months for which this year's payments were made. If your annuity starting date 
was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Otherwise, go 
to line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.    1,000
6. Enter any amounts previously recovered tax free in years after 1986. This is the amount shown on line 10 of 
your worksheet for last year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            6.    0
7. Subtract line 6 from line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      7.    36,000
8. Enter the smaller of line 5 or line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            8.    1,000
9. Taxable amount for year. Subtract line 8 from line 1. Enter the result, but not less than zero. Also, add this 
amount to the total for Form 1040 or 1040-SR, line 5b. If you are a nonresident alien, enter this amount on line 1 
of Worksheet C. If your Form CSA 1099-R or Form CSF 1099-R shows a larger amount, use the amount figured 
on this line instead. If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums 
for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 . . . . . .                                                     9.  $ 14,000
10. Was your annuity starting date before 1987? 
         STOP
      Yes.   Don't complete the rest of this worksheet.
 
     No. Add lines 6 and 8. This is the amount you have recovered tax free through 2022. You will need this 
number if you need to fill out this worksheet next year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         10.   1,000
11. Balance of cost to be recovered. Subtract line 10 from line 2. If zero, you will not have to complete this 
worksheet next year. The payments you receive next year will generally be fully taxable . . . . . . . . . . . . . . . . . .                                               11. $ 35,000

                                                Table 1 for Line 3 Above
                                                                      AND your annuity starting date was—
IF your age on your                                       before November 19, 1996,                   after November 18, 1996, 
annuity starting date was . . .                           THEN enter on line 3 . . .                  THEN enter on line 3 . . .
55 or under                                                           300                                                                                                 360
56–60                                                                 260                                                                                                 310
61–65                                                                 240                                                                                                 260
66–70                                                                 170                                                                                                 210
71 or over                                                            120                                                                                                 160
                                                Table 2 for Line 3 Above
IF the annuitants' combined 
ages on your annuity starting 
date were . . .                                           THEN enter on line 3 . . .
110 or under                                                          410
111–120                                                               360
121–130                                                               310
131–140                                                               260
141 or over                                                           210

* A death benefit exclusion of up to $5,000 applies to certain benefits received by survivors of employees who died 
before August 21, 1996.

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when there is no surviving spouse annuity. To use this The exclusion doesn't apply if your actions were a sub-
method, divide the deceased employee's cost by the stantial contributing factor to the death of the officer. It
number of months from the child's annuity starting date also doesn't apply if:
until the date the child will reach age 22. The result is the
• The death was caused by the intentional misconduct
monthly exclusion. (However, the monthly exclusion can't
of the officer or by the officer's intention to cause their
be more than the monthly annuity payment. You can carry
own death,
over unused exclusion amounts to apply against future
annuity payments.) • The officer was voluntarily intoxicated at the time of
death, or
More than one child. If there is more than one child
entitled to a temporary annuity (and no surviving spouse • The officer was performing their duties in a grossly
annuity), divide the cost by the number of months of pay- negligent manner at the time of death.
ments until the date the youngest child will reach age 22. The special death benefit paid to the spouse of a
This monthly exclusion must then be allocated among the ! FERS employee (see FERS Death Benefit, ear-
children in proportion to their monthly annuity payments, CAUTION lier) isn't eligible for this exclusion.
like the exclusion shown in the previous example.
Disabled child. If a child otherwise entitled to a tem-
Lump-Sum CSRS or FERS Payment
porary annuity was permanently disabled at the annuity
starting date (and there is no surviving spouse annuity), If a federal employee dies before retiring and leaves no
that child is treated for tax purposes as receiving a lifetime one eligible for a survivor annuity, the estate or other ben-
annuity, like a surviving spouse. The child must complete eficiary will receive a lump-sum payment from the CSRS
line 3 of Worksheet A using a number in Table 1 at the or FERS. This single payment is made up of the regular
bottom of the worksheet corresponding to the child's age contributions to the retirement fund plus accrued interest,
at the annuity starting date. If more than one child is enti- if any, to the extent not already paid to the employee.
tled to a temporary annuity, an allocation like the one
shown under Surviving spouse with child, earlier, must be The beneficiary is taxed, in the year the lump sum is
made to determine each child's share of the exclusion. distributed or made available, only on the amount of any
accrued interest. The taxable amount, if any, generally
Exclusion limit. If your annuity starting date is after can't be rolled over into an IRA or other plan and is subject
1986, the most that can be recovered tax free is the cost to federal income tax withholding at a 10% rate. However,
of the annuity. Once the total of your exclusions equals a nonspousal beneficiary making a transfer described un-
the cost, your entire annuity is taxable. If your annuity der Rollovers by nonspouse beneficiary under Rollover
starting date is before 1987, the tax-free part of each Rules in Part II can roll over any taxable amount. In addi-
whole monthly payment remains the same each year you tion, the payment may qualify as a lump-sum distribution
receive payments—even if you outlive the number of eligible for capital gain treatment or the 10-year tax option
months used on line 3 of the Simplified Method Work- if the plan participant was born before January 2, 1936. If
sheet. The total exclusion may be more than the cost of the beneficiary also receives a lump-sum payment of un-
the annuity. recovered voluntary contributions plus interest, this treat-
ment applies only if the payment is received within the
Deduction of unrecovered cost. If the annuity starting same tax year. For more information, see Lump-Sum Dis-
date is after July 1, 1986, and the annuitant's death occurs tributions in Pub. 575.
before all the cost is recovered tax free, the unrecovered
cost can be claimed as an “Other Itemized Deduction” for Lump-sum payment at end of survivor annuity. If an
the annuitant's last tax year. annuity is paid to the federal employee's survivor and the
survivor annuity ends before an amount equal to the de-
Survivors of Slain Public Safety Officers ceased employee's contributions plus any interest has
been paid out, the rest of the contributions plus any inter-
Generally, if you receive survivor annuity payments as the est will be paid in a lump sum to the employee's estate or
spouse, former spouse, or child of a public safety officer other beneficiary. Generally, this beneficiary will not have
killed in the line of duty, you can exclude the payments to include any of the lump sum in gross income because,
from your income. The annuity is excludable to the extent when it is added to the amount of the annuity previously
that it is due to the officer's service as a public safety offi- received that was excludable, it will still be less than the
cer. Public safety officers include law enforcement offi- employee's total contributions.
cers, firefighters, chaplains, ambulance crew members, Any unrecovered cost is allowed as an “Other Itemized
and rescue squad members. The provision applies to a Deduction” on the final return of the annuitant.
chaplain killed in the line of duty after September 10, To figure the taxable amount, if any, use Worksheet D.
2001. The chaplain must have been responding to a fire,
rescue, or police emergency as a member or employee of
a fire or police department.

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Worksheet D. Lump-Sum Payment ditional annuity to the survivors. Instead, the voluntary
at End of Survivor contributions plus any accrued interest will be paid in a
Annuity lump sum to the estate or other beneficiary. The benefi-
ciary must generally include any interest received in in-
Keep for Your Records
come for the year distributed or made available. However,
1. Enter the lump-sum payment . . . . . . 1. if the beneficiary is the employee's surviving spouse (or
2. Enter the amount of annuity previously someone other than the employee's spouse making a
received tax free . . . . . . . . . . . . . . . . . 2. transfer described under Rollovers by nonspouse benefi-
ciary under Rollover Rules in Part II), the interest can be
3. Add lines 1 and 2 . . . . . . . . . . . . . . . . 3.
rolled over. See also Rollovers by surviving spouse under
4. Enter the employee's total cost . . . . . 4. Rollover Rules in Part II.
5. Taxable amount. Subtract line 4 from The interest, if not rolled over, is generally subject to
line 3. Enter the result, but not less federal income tax withholding at a 20% rate (or 10% rate
than zero . . . . . . . . . . . . . . . . . . . . . . . 5. if the beneficiary isn't the employee's surviving spouse). It
may qualify as a lump-sum distribution eligible for capital
The taxable amount, if any, generally can't be rolled gain treatment or the 10-year tax option if:
over into an IRA or other plan and is subject to federal in-
come tax withholding at a 10% rate. However, a non- • The plan participant was born before January 2, 1936;
spousal beneficiary making a transfer described under • Regular annuity benefits can't be paid under the retire-
Rollovers by nonspouse beneficiary under Rollover Rules ment system; and
in Part II can roll over any taxable amount. In addition, the
• The beneficiary also receives a lump-sum payment of
payment may qualify as a lump-sum distribution eligible
the regular contributions plus interest within the same
for capital gain treatment or the 10-year tax option if the
tax year as the voluntary contributions.
plan participant was born before January 2, 1936. If the
beneficiary also receives a lump-sum payment of unrec- For more information, see Lump-Sum Distributions in
overed voluntary contributions plus interest, this treatment Pub. 575.
applies only if the payment is received within the same tax
year. For more information, see Lump-Sum Distributions Thrift Savings Plan (TSP)
in Pub. 575.
The payment you receive as the beneficiary of a dece-
Example. At the time of your brother's death in De- dent's TSP account is fully taxable except for the portion
cember 2021, he was employed by the federal govern- that is from Roth contributions and earnings if certain con-
ment and had contributed $45,000 to the CSRS. His sur- ditions are met. See Roth TSP balance, earlier. However,
viving spouse received $6,600 in survivor annuity if you are the decedent's surviving spouse (or someone
payments before she died in 2022. She had used the Sim- other than the employee's spouse making a transfer de-
plified Method for reporting her annuity and properly ex- scribed under Rollovers by nonspouse beneficiary under
cluded $1,000 from gross income. Rollover Rules in Part II), you can generally roll over the
Only $6,600 of the guaranteed amount of $45,000 payment tax free. If you don't choose a direct rollover of
(your brother's contributions) was paid as an annuity, so the decedent's TSP account, mandatory 20% income tax
the balance of $38,400 was paid to you in a lump sum as withholding will apply unless it is from Roth contributions.
your brother's sole beneficiary. You figure the taxable See Roth TSP balance, earlier. For more information, see
amount of this payment as follows. Rollover Rules in Part II. If you are neither the surviving
spouse nor someone other than the employee's spouse
Worksheet D. Lump-Sum Payment making a transfer described above, the payment isn't eligi-
at End of Survivor ble for rollover treatment. The TSP will withhold 10% of
Annuity—Example the payment for federal income tax, unless you gave the
Keep for Your Records TSP a Form W-4P to choose not to have tax withheld.

1. Enter the lump-sum payment . . . . . . 1. $ 38,400 If the entire TSP account balance is paid to the benefi-
2. Enter the amount of annuity previously ciaries in the same calendar year, it may qualify as a
received tax free . . . . . . . . . . . . . . . . . 2. 1,000 lump-sum distribution eligible for the 10-year tax option if
3. Add lines 1 and 2 . . . . . . . . . . . . . . . . 3. 39,400 the plan participant was born before January 2, 1936. See
Lump-Sum Distributions in Pub. 575 for details. Also, see
4. Enter the employee's total cost . . . . . 4. 45,000 Important Tax Information About Thrift Savings Plan
5. Taxable amount. Subtract line 4 from Death Benefit Payments, which is available from the TSP.
line 3. Enter the result, but not less
than zero . . . . . . . . . . . . . . . . . . . . . . . 5. 0 Beneficiary participant account. A beneficiary partici-
pant account will be established for a spouse beneficiary.
Voluntary contributions. If a CSRS employee dies be- The money in the account isn't subject to federal income
fore retiring from government service, voluntary contribu- tax until it is withdrawn. However, the portion that is from
tions to the retirement fund can't be used to provide an ad- Roth contributions and earnings, if certain conditions are
met, will not be subject to tax. See Roth TSP balance,

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earlier, for a discussion of the conditions. For more infor- of the retiree's death. If you are the survivor of a federal
mation on beneficiary participant accounts, see Death employee, see Part IV.
Benefits, Information for Participants and Beneficiaries,
available from the TSP. Decedent's retirement benefits. Retirement benefits
accrued and payable to a CSRS or FERS retiree before
Both of the above TSP documents are available death, but paid to you as a survivor, are taxable in the
on the TSP website at TSP.gov. Select “Forms & same manner and to the same extent these benefits
Publications.” would have been taxable had the retiree lived to receive
them.
If you receive a payment from a uniformed serv-

CAUTION combat pay, see Uniformed services Thrift Sav-
! ices TSP account that includes contributions from CSRS or FERS Survivor Annuity
ings Plan (TSP) accounts under Reminders near the be-
ginning of this publication. CSRS or FERS annuity payments you receive as the sur-
vivor of a federal retiree are fully or partly taxable under ei-
ther the General Rule or the Simplified Method.
Federal Estate Tax
Cost recovered. If the retiree reported the annuity under
the 3-Year Rule and recovered all of the cost tax free, your
Form 706, United States Estate (and Generation-Skipping
survivor annuity payments are fully taxable. This is also
Transfer) Tax Return, must be filed for the estate of a citi-
true if the retiree had an annuity starting date after 1986,
zen or resident alien of the United States who died in 2022
reported the annuity under the General Rule or the Simpli-
if the gross estate is more than $12,060,000. Included in
fied Method, and had fully recovered the cost tax free.
this $12,060,000 are any adjusted taxable gifts made by
the decedent after 1976 and the specific exemption al- General Rule. If the retiree was reporting the annuity un-
lowed for gifts by the decedent after September 8, 1976, der the General Rule, figure the tax-free part of the annuity
and before 1977. using the same exclusion percentage that the retiree
used. Apply the exclusion percentage to the amount
The gross estate generally includes the value of all
specified as your survivor annuity at the retiree's annuity
property beneficially owned by the decedent at the time of
starting date. Don't apply the exclusion percentage to any
death. Examples of property included in the gross estate
cost-of-living increases made after that date. Those in-
are salary or annuity payments that had accrued to an em-
creases are fully taxable. For more information about the
ployee or retiree, but which weren't paid before death, and
General Rule, see Pub. 939.
the balance in the decedent's TSP account.
Simplified Method. If the retiree was reporting the annu-
The gross estate also usually includes the value of the
ity under the Simplified Method, your tax-free monthly
death and survivor benefits payable under the CSRS or
amount is the same as the retiree's monthly exclusion
the FERS. If the federal employee died leaving no one eli-
(Worksheet A, line 4). This amount remains fixed even if
gible to receive a survivor annuity, the lump sum (repre-
the monthly payment is increased or decreased. A
senting the employee's contribution to the retirement sys-
cost-of-living increase in your survivor annuity payments
tem plus any accrued interest) payable to the estate or
doesn't change the amount you can exclude from gross
other beneficiary is included in the employee's gross es-
income.
tate.
Exclusion limit. If the retiree's annuity starting date was
Marital deduction. The estate tax marital deduction is a
before 1987, you can exclude the tax-free amount from all
deduction from the gross estate of the value of property
the annuity payments you receive. This includes any pay-
that is included in the gross estate but that passes, or has
ments received after you recover the cost tax free.
passed, to the surviving spouse. Generally, there is no
If the retiree's annuity starting date is after 1986, you
limit on the amount of the marital deduction. Community
can exclude the tax-free amount only until you recover the
property passing to the surviving spouse qualifies for the
cost tax free. The annuity payments you receive after you
marital deduction.
recover the annuity cost tax free are fully taxable.
More information. For more information, see Pub. 559,
Deduction of unrecovered cost. If the annuity starting
Survivors, Executors, and Administrators.
date is after July 1, 1986, and the survivor annuitant's
death occurs before all the cost is recovered tax free, the
unrecovered cost can be claimed as an “Other Itemized
Part V Deduction” for the annuitant's last tax year.

Rules for Survivors Surviving spouse with child. If the survivor benefits in-
clude both a life annuity for the surviving spouse and one
of Federal Retirees or more temporary annuities for the retiree's children, the
tax-free monthly amount that would otherwise apply to the
This part of the publication is for survivors of federal retir- life annuity must be allocated among the beneficiaries. To
ees. It explains how to treat amounts you receive because

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figure the tax-free monthly amount for each beneficiary, Worksheet E. Lump-Sum Payment at
multiply it by a fraction. The numerator of the fraction is End of Retiree's
the beneficiary's monthly annuity, and the denominator of Annuity (With No
the fraction is the total of the monthly annuity payments to
Survivor Annuity)
all the beneficiaries.
Keep for Your Records
Example. John retired in 2020 and began receiving a 1. Enter the lump-sum payment . . . . . . 1.
$1,147 per month CSRS retirement annuity with a survivor
annuity payable to his wife, Kate, upon his death. He re- 2. Enter the amount of annuity received
ported his annuity using the Simplified Method. Under that tax free by the retiree . . . . . . . . . . . . . 2.
method, $150 of each payment he received was a tax-free 3. Add lines 1 and 2 . . . . . . . . . . . . . . . . 3.
recovery of his $45,000 cost. John received a total of 22 4. Enter the total cost . . . . . . . . . . . . . . . 4.
monthly payments and recovered $3,300 of his cost tax
5. Taxable amount. Subtract line 4 from
free before his death in 2022. At John's death, Kate began line 3. Enter the result, but not less
receiving an annuity of $840 per month and their children, than zero . . . . . . . . . . . . . . . . . . . . . . . 5.
Sam and Lou, began receiving temporary annuities of
$330 each per month. Kate must allocate the $150
The taxable amount, if any, generally can't be rolled
tax-free monthly amount among the three annuities.
over into an IRA or other plan and is subject to federal in-
To find how much of the monthly exclusion to allocate
come tax withholding at a 10% rate. However, a non-
to her own annuity, Kate multiplies the $150 tax-free
spousal beneficiary making a transfer described under
monthly amount by the fraction $840 (her monthly annuity)
Rollovers by nonspouse beneficiary under Rollover Rules
over $1,500 (the total of her $840, Sam's $330, and Lou's
in Part II can roll over any taxable amount. In addition, the
$330 monthly annuities). Her resulting monthly exclusion
payment may qualify as a lump-sum distribution eligible
is $84. In allocating the $150 monthly exclusion to each
for capital gain treatment or the 10-year tax option if the
child's annuity, the $150 is multiplied by the fraction $330
plan participant was born before January 2, 1936. If the
(each child's monthly annuity) over $1,500. Each child's
beneficiary also receives a lump-sum payment of unrec-
resulting monthly exclusion is $33.
overed voluntary contributions plus interest, this treatment
Beginning with the month in which either child is no lon-
applies only if the payment is received within the same tax
ger eligible for an annuity, as specified in the plan, Kate
year. For more information, see Lump-Sum Distributions
will reallocate the $150 monthly exclusion to her own an-
in Pub. 575.
nuity by multiplying the $150 by the fraction $840 over
$1,170 (the total of her $840 and her other child's $330
monthly annuities). Her resulting monthly exclusion is Voluntary Contributions
$108. In reallocating the $150 monthly exclusion to the
other child's annuity, the $150 is multiplied by the fraction If you receive an additional survivor annuity benefit from
$330 over $1,170. The other child's resulting monthly ex- voluntary contributions to the CSRS, treat it separately
clusion is $42. from the annuity that comes from regular contributions.
Each year, you will receive a Form CSF 1099-R that will
Surviving child only. If the survivor benefits include only show how much of your total annuity received in the past
a temporary annuity for the retiree's child, allocate the un- year was from each type of benefit.
recovered cost over the number of months from the date
the annuity started until the child reaches age 22. If more Figure the taxable and tax-free parts of your additional
than one temporary annuity is paid, allocate the cost over survivor annuity benefit from voluntary contributions using
the number of months until the youngest child reaches the same rules that apply to regular CSRS and FERS sur-
age 22, and allocate the tax-free monthly amount among vivor annuities, as explained earlier under CSRS or FERS
the annuities in proportion to the monthly annuity pay- Survivor Annuity.
ments.
Lump-sum payment. Figure the taxable amount, if any,
of a lump-sum payment of the retiree's unrecovered vol-
Lump-Sum CSRS or FERS Payment untary contributions plus any interest using the rules that
apply to regular lump-sum CSRS or FERS payments, as
If a deceased retiree has no beneficiary eligible to receive
explained earlier under Lump-Sum CSRS or FERS Pay-
a survivor annuity, and the deceased retiree's annuity
ment.
ends before an amount equal to the deceased retiree's
contributions plus any interest has been paid out, the rest
of the contributions plus any interest will be paid in a lump Thrift Savings Plan (TSP)
sum to the estate or other beneficiary. The estate or other
beneficiary will rarely have to include any part of the lump If you receive a payment from the TSP account of a de-
sum in gross income. The taxable amount is figured by us- ceased federal retiree, the payment is fully taxable except
ing Worksheet E. for the portion that is from Roth contributions and earnings
if certain conditions are met. See Roth TSP balance, ear-
lier. However, if you are the retiree's surviving spouse (or
someone other than the retiree's spouse making a transfer

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described under Rollovers by nonspouse beneficiary un- Federal Estate Tax
der Rollover Rules in Part II), you can generally roll over
the otherwise taxable payment tax free. If you don't A federal estate tax return may have to be filed for the es-
choose a direct rollover of the TSP account, mandatory tate of the retired employee. See Federal Estate Tax in
20% federal income tax withholding will apply unless it is Part IV.
from your Roth contributions. See Roth TSP balance, ear-
lier. For more information, see Rollover Rules in Part II. If
Income Tax Deduction for Estate Tax
you are neither the surviving spouse nor someone other
than the retiree's spouse making a transfer described Paid
above, the payment isn't eligible for rollover treatment.
Any income that a decedent had a right to receive and
The TSP will withhold 10% of the payment for federal in-
could have received had death not occurred and that
come tax, unless you gave the TSP a Form W-4P to
wasn't properly includible in the decedent's final income
choose not to have tax withheld.
tax return is treated as income in respect of a decedent.
If the retiree chose to receive their account balance as This includes retirement benefits accrued and payable to
an annuity, the payments you receive as the retiree's sur- a retiree before death, but paid to you as a survivor.
vivor are fully taxable when you receive them, whether
they are received as annuity payments or as a cash re- If the federal estate tax was paid on the decedent's es-
fund of the remaining value of the amount used to pur- tate and you are required to include income in respect of a
chase the annuity. However, the portion that is from Roth decedent in your gross income for any tax year, you can
contributions and earnings, if certain conditions are met, deduct the portion of the federal estate tax that is from the
will not be subject to tax. See Roth TSP balance, earlier. inclusion in the estate of the right to receive that amount.
For this purpose, if the decedent died after the annuity
Beneficiary participant account. A beneficiary partici- starting date, the taxable portion of a survivor annuity you
pant account will be established for a spouse beneficiary. receive (other than a temporary annuity for a child) is con-
The money in the account isn't subject to federal income sidered income in respect of a decedent.
tax until it is withdrawn. The portion withdrawn that is from
For more information, see Income in Respect of a De-
Roth contributions and earnings, if certain conditions are
cedent in Pub. 559.
met, will not be subject to tax. See Roth TSP balance, ear-
lier, for a discussion of the conditions. For more informa-
tion on beneficiary participant accounts, see Death Bene-
fits, Information for Participants and Beneficiaries,
available from the TSP.
If you receive a payment from a uniformed serv-
! ices TSP account that includes contributions from
CAUTION combat pay, see Uniformed services Thrift Sav-
ings Plan (TSP) accounts under Reminders near the be-
ginning of this publication.

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Worksheets A and B

This section contains blank Worksheets A and B for you to 
use for your own calculations.

Worksheet A. Simplified Method                                                                        Keep for Your Records
See the instructions in Part II of this publication under Simplified Method.
1. Enter the total pension or annuity payments received this year. Also, add this amount to the total for Form 1040, 
    1040-SR, or 1040-NR, line 5a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        1.   
2. Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion.  See * Your cost in Part II, Rules 
    for Retirees, earlier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.   
    Note. If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and 
    enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has 
    changed). Otherwise, go to line 3.
3. Enter the appropriate number from Table 1 below. But if your annuity starting date was after 1997 and the payments 
    are for your life and that of your beneficiary, enter the appropriate number from Table 2 below . . . . . . . . . . . . . . . . .                                     3.   
4. Divide line 2 by the number on line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          4.   
5. Multiply line 4 by the number of months for which this year's payments were made. If your annuity starting date was 
    before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. Otherwise, go to line 6 . . . . . . . . . . . .                                       5.   
6. Enter any amounts previously recovered tax free in years after 1986. This is the amount shown on line 10 of your 
    worksheet for last year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6.   
7. Subtract line 6 from line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7.   
8. Enter the smaller of line 5 or line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        8.   
9. Taxable amount for year. Subtract line 8 from line 1. Enter the result, but not less than zero. Also, add this amount to 
    the total for Form 1040 or 1040-SR, line 5b. If you are a nonresident alien, enter this amount on line 1 of Worksheet C. 
    If your Form CSA 1099-R or Form CSF 1099-R shows a larger amount, use the amount figured on this line instead. If 
    you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in 
    Part II before entering an amount on your tax return or Worksheet C, line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                           9.
10. Was your annuity starting date before 1987? 
          STOP
     Yes.        Don't complete the rest of this worksheet.
     
     No. Add lines 6 and 8. This is the amount you have recovered tax free through 2022. You will need this number if 
    you need to fill out this worksheet next year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           10.  
11. Balance of cost to be recovered. Subtract line 10 from line 2. If zero, you will not have to complete this worksheet 
    next year. The payments you receive next year will generally be fully taxable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             11.

                                                            Table 1 for Line 3 Above
                                                                                    AND your annuity starting date was—
    IF your age on your annuity                             before November 19, 1996,                          after November 18, 1996, 
    starting date was . . .                                 THEN enter on line 3 . . .                         THEN enter on line 3 . . .
    55 or under                                                           300                                                                                             360
    56–60                                                                 260                                                                                             310
    61–65                                                                 240                                                                                             260
    66–70                                                                 170                                                                                             210
    71 or over                                                            120                                                                                             160
                                                            Table 2 for Line 3 Above
    IF the annuitants' combined ages 
    on your annuity starting date 
    were . . .                                              THEN enter on line 3 . . .
    110 or under                                                          410
    111–120                                                               360
    121–130                                                               310
    131–140                                                               260
    141 or over                                                           210

* A death benefit exclusion of up to $5,000 applies to certain benefits received by survivors of employees who died be-
fore August 21, 1996.

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Worksheet B. Lump-Sum Payment 
               See the instructions in Part II of this publication 
               under Alternative Annuity Option.                                                           Keep for Your Records

1. Enter your lump-sum credit (your cost in the plan at the annuity starting date) . . . . . . . . . . . . . . . . . . . . .                             1.              
2. Enter the present value of your annuity contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  2.              
3. Divide line 1 by line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3.              
4. Tax-free amount. Multiply line 1 by line 3. (Caution: Don't include this amount on line 6 of Worksheet A in 
   this publication.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4.              
5. Taxable amount (net cost in the plan). Subtract line 4 from line 1. Include this amount in the total on 
   Form 1040, 1040-SR, or 1040-NR, line 5b. Also, enter this amount on line 2 of Worksheet A in this 
   publication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.              

                                                                      pensions and retirement-related issues unique to se-
                                                                      niors. Go to IRS.gov/TCE, download the free IRS2Go 
                                                                      app, or call 888-227-7669 for information on free tax 
How To Get Tax Help
                                                                      return preparation.
If you have questions about a tax issue; need help prepar-          • MilTax. Members of the U.S. Armed Forces and 
ing your tax return; or want to download free publications,           qualified veterans may use MilTax, a free tax service 
forms, or instructions, go to IRS.gov to find resources that          offered by the Department of Defense through Military 
can help you right away.                                              OneSource. For more information, go to 
                                                                      MilitaryOneSource MilitaryOneSource.mil/MilTax (                                        ).
Preparing and filing your tax return.           After receiving all    Also, the IRS offers Free Fillable Forms, which can 
your wage and earnings statements (Forms W-2, W-2G,                   be  completed  online  and  then  filed  electronically  re-
1099-R,  1099-MISC,  1099-NEC,  etc.);  unemployment                  gardless of income.
compensation statements (by mail or in a digital format) or 
other  government  payment  statements  (Form  1099-G);             Using online tools to help prepare your return.                                         Go to 
and  interest,  dividend,  and  retirement  statements  from        IRS.gov/Tools for the following.
banks and investment firms (Forms 1099), you have sev-
                                                                    • The Earned Income Tax Credit Assistant IRS.gov/ (
eral options to choose from to prepare and file your tax re-
                                                                      EITCAssistant) determines if you’re eligible for the 
turn.  You  can  prepare  the  tax  return  yourself,  see  if  you 
                                                                      earned income credit (EIC).
qualify for free tax preparation, or hire a tax professional to 
prepare your return.                                                • The Online EIN Application IRS.gov/EIN (                                              ) helps you 
                                                                      get an employer identification number (EIN) at no 
Free options for tax preparation.    Go to          IRS.gov to see    cost.
your options for preparing and filing your return online or 
in your local community, if you qualify, which include the          • The Tax Withholding Estimator IRS.gov/W4app (                                         ) 
                                                                      makes it easier for you to estimate the federal income 
following.
                                                                      tax you want your employer to withhold from your pay-
•  Free File. This program lets you prepare and file your             check. This is tax withholding. See how your withhold-
   federal individual income tax return for free using                ing affects your refund, take-home pay, or tax due.
   brand-name tax-preparation-and-filing software or 
   Free File fillable forms. However, state tax preparation         • The First-Time Homebuyer Credit Account Look-up 
                                                                      (IRS.gov/HomeBuyer) tool provides information on 
   may not be available through Free File. Go to IRS.gov/
                                                                      your repayments and account balance.
   FreeFile to see if you qualify for free online federal tax 
   preparation, e-filing, and direct deposit or payment op-         • The Sales Tax Deduction Calculator IRS.gov/ (
   tions.                                                             SalesTax) figures the amount you can claim if you 
                                                                      itemize deductions on Schedule A (Form 1040).
•  VITA. The Volunteer Income Tax Assistance (VITA) 
   program offers free tax help to people with                         Getting  answers  to  your  tax  questions.  On 
   low-to-moderate incomes, persons with disabilities,                 IRS.gov,  you  can  get  up-to-date  information  on 
   and limited-English-speaking taxpayers who need                     current events and changes in tax law.
   help preparing their own tax returns. Go to IRS.gov/
                                                                    • IRS.gov/Help: A variety of tools to help you get an-
   VITA, download the free IRS2Go app, or call 
                                                                      swers to some of the most common tax questions.
   800-906-9887 for information on free tax return prepa-
   ration.                                                          • IRS.gov/ITA: The Interactive Tax Assistant, a tool that 
                                                                      will ask you questions and, based on your input, pro-
•  TCE. The Tax Counseling for the Elderly (TCE) pro-
                                                                      vide answers on a number of tax law topics.
   gram offers free tax help for all taxpayers, particularly 
   those who are 60 years of age and older. TCE volun-              • IRS.gov/Forms: Find forms, instructions, and publica-
   teers specialize in answering questions about                      tions. You will find details on the most recent tax 

Publication 721 (2022)                                                                                                                                          Page 29

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changes and interactive links to help you find answers Online tax information in other languages. You can
to your questions. find information on IRS.gov/MyLanguage if English isn’t
your native language.
• You may also be able to access tax law information in
your electronic filing software. Free Over-the-Phone Interpreter (OPI) Service. The
IRS is committed to serving our multilingual customers by
Need someone to prepare your tax return? There are offering OPI services. The OPI Service is a federally fun-
various types of tax return preparers, including enrolled ded program and is available at Taxpayer Assistance
agents, certified public accountants (CPAs), accountants, Centers (TACs), other IRS offices, and every VITA/TCE
and many others who don’t have professional credentials. return site. The OPI Service is accessible in more than
If you choose to have someone prepare your tax return, 350 languages.
choose that preparer wisely. A paid tax preparer is:
Accessibility Helpline available for taxpayers with
• Primarily responsible for the overall substantive accu- disabilities. Taxpayers who need information about ac-
racy of your return, cessibility services can call 833-690-0598. The Accessi-
• Required to sign the return, and bility Helpline can answer questions related to current and
future accessibility products and services available in al-
• Required to include their preparer tax identification ternative media formats (for example, braille, large print,
number (PTIN). audio, etc.). The Accessibility Helpline does not have ac-
Although the tax preparer always signs the return, cess to your IRS account. For help with tax law, refunds,
you're ultimately responsible for providing all the informa- or account-related issues, go to IRS.gov/LetUsHelp.
tion required for the preparer to accurately prepare your
Note. Form 9000, Alternative Media Preference, or
return. Anyone paid to prepare tax returns for others
Form 9000(SP) allows you to elect to receive certain types
should have a thorough understanding of tax matters. For
of written correspondence in the following formats.
more information on how to choose a tax preparer, go to
Tips for Choosing a Tax Preparer on IRS.gov. • Standard Print.
Coronavirus. Go to IRS.gov/Coronavirus for links to in- • Large Print.
formation on the impact of the coronavirus, as well as tax • Braille.
relief available for individuals and families, small and large
• Audio (MP3).
businesses, and tax-exempt organizations.
• Plain Text File (TXT).
Employers can register to use Business Services On-
line. The Social Security Administration (SSA) offers on- • Braille Ready File (BRF).

line service at SSA.gov/employer for fast, free, and secure Disasters. Go to Disaster Assistance and Emergency
online W-2 filing options to CPAs, accountants, enrolled Relief for Individuals and Businesses to review the availa-
agents, and individuals who process Form W-2, Wage ble disaster tax relief.
and Tax Statement, and Form W-2c, Corrected Wage and
Tax Statement. Getting tax forms and publications. Go to IRS.gov/
Forms to view, download, or print all the forms, instruc-
IRS social media. Go to IRS.gov/SocialMedia to see the tions, and publications you may need. Or, you can go to
various social media tools the IRS uses to share the latest IRS.gov/OrderForms to place an order.
information on tax changes, scam alerts, initiatives, prod-
ucts, and services. At the IRS, privacy and security are Getting tax publications and instructions in eBook
our highest priority. We use these tools to share public in- format. You can also download and view popular tax
formation with you. Don’t post your social security number publications and instructions (including the Instructions for
(SSN) or other confidential information on social media Form 1040) on mobile devices as eBooks at IRS.gov/
sites. Always protect your identity when using any social eBooks.
networking site.
The following IRS YouTube channels provide short, in- Note. IRS eBooks have been tested using Apple's
formative videos on various tax-related topics in English, iBooks for iPad. Our eBooks haven’t been tested on other
Spanish, and ASL. dedicated eBook readers, and eBook functionality may
not operate as intended.
• Youtube.com/irsvideos.
• Youtube.com/irsvideosmultilingua. Access your online account (individual taxpayers
only). Go to IRS.gov/Account to securely access infor-
• Youtube.com/irsvideosASL. mation about your federal tax account.
Watching IRS videos. The IRS Video portal • View the amount you owe and a breakdown by tax
(IRSVideos.gov) contains video and audio presentations year.
for individuals, small businesses, and tax professionals.
• See payment plan details or apply for a new payment
plan.

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• Make a payment or view 5 years of payment history Ways to check on the status of your refund.
and any pending or scheduled payments.
• Go to IRS.gov/Refunds.
• Access your tax records, including key data from your
• Download the official IRS2Go app to your mobile de-
most recent tax return, and transcripts.
vice to check your refund status.
• View digital copies of select notices from the IRS.
• Call the automated refund hotline at 800-829-1954.
• Approve or reject authorization requests from tax pro-
fessionals. Note. The IRS can’t issue refunds before mid-Febru-
ary for returns that claimed the EIC or the additional child
• View your address on file or manage your communi- tax credit (ACTC). This applies to the entire refund, not
cation preferences. just the portion associated with these credits.

Tax Pro Account. This tool lets your tax professional Making a tax payment. Go to IRS.gov/Payments for in-
submit an authorization request to access your individual formation on how to make a payment using any of the fol-
taxpayer IRS online account. For more information, go to lowing options.
IRS.gov/TaxProAccount.
• IRS Direct Pay: Pay your individual tax bill or estima-
Using direct deposit. The fastest way to receive a tax ted tax payment directly from your checking or sav-
refund is to file electronically and choose direct deposit, ings account at no cost to you.
which securely and electronically transfers your refund di-
• Debit or Credit Card: Choose an approved payment
rectly into your financial account. Direct deposit also
processor to pay online or by phone.
avoids the possibility that your check could be lost, stolen,
destroyed, or returned undeliverable to the IRS. Eight in • Electronic Funds Withdrawal: Schedule a payment
10 taxpayers use direct deposit to receive their refunds. If when filing your federal taxes using tax return prepara-
you don’t have a bank account, go to IRS.gov/ tion software or through a tax professional.
DirectDeposit for more information on where to find a • Electronic Federal Tax Payment System: Best option
bank or credit union that can open an account online. for businesses. Enrollment is required.
Getting a transcript of your return. The quickest way • Check or Money Order: Mail your payment to the ad-
to get a copy of your tax transcript is to go to IRS.gov/ dress listed on the notice or instructions.
Transcripts. Click on either “Get Transcript Online” or “Get Cash: You may be able to pay your taxes with cash at
•
Transcript by Mail” to order a free copy of your transcript. a participating retail store.
If you prefer, you can order your transcript by calling
800-908-9946. • Same-Day Wire: You may be able to do same-day
wire from your financial institution. Contact your finan-
Reporting and resolving your tax-related identity cial institution for availability, cost, and time frames.
theft issues.
Note. The IRS uses the latest encryption technology to
• Tax-related identity theft happens when someone ensure that the electronic payments you make online, by
steals your personal information to commit tax fraud. phone, or from a mobile device using the IRS2Go app are
Your taxes can be affected if your SSN is used to file a safe and secure. Paying electronically is quick, easy, and
fraudulent return or to claim a refund or credit. faster than mailing in a check or money order.
• The IRS doesn’t initiate contact with taxpayers by
email, text messages (including shortened links), tele- What if I can’t pay now? Go to IRS.gov/Payments for
phone calls, or social media channels to request or more information about your options.
verify personal or financial information. This includes • Apply for an online payment agreement IRS.gov/ (
requests for personal identification numbers (PINs), OPA) to meet your tax obligation in monthly install-
passwords, or similar information for credit cards, ments if you can’t pay your taxes in full today. Once
banks, or other financial accounts. you complete the online process, you will receive im-
• Go to IRS.gov/IdentityTheft, the IRS Identity Theft mediate notification of whether your agreement has
Central webpage, for information on identity theft and been approved.
data security protection for taxpayers, tax professio- • Use the Offer in Compromise Pre-Qualifier to see if
nals, and businesses. If your SSN has been lost or you can settle your tax debt for less than the full
stolen or you suspect you’re a victim of tax-related amount you owe. For more information on the Offer in
identity theft, you can learn what steps you should Compromise program, go to IRS.gov/OIC.
take.
Filing an amended return. Go to IRS.gov/Form1040X
• Get an Identity Protection PIN (IP PIN). IP PINs are
for information and updates.
six-digit numbers assigned to taxpayers to help pre-
vent the misuse of their SSNs on fraudulent federal in- Checking the status of your amended return. Go to
come tax returns. When you have an IP PIN, it pre- IRS.gov/WMAR to track the status of Form 1040-X amen-
vents someone else from filing a tax return with your ded returns.
SSN. To learn more, go to IRS.gov/IPPIN.

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Note. It can take up to 3 weeks from the date you filed What Can TAS Do for You?
your amended return for it to show up in our system, and
processing it can take up to 16 weeks. TAS can help you resolve problems that you can’t resolve
with the IRS. And their service is free. If you qualify for
Understanding an IRS notice or letter you’ve re- their assistance, you will be assigned to one advocate
ceived. Go to IRS.gov/Notices to find additional informa- who will work with you throughout the process and will do
tion about responding to an IRS notice or letter. everything possible to resolve your issue. TAS can help
Note. You can use Schedule LEP (Form 1040), Re- you if:
quest for Change in Language Preference, to state a pref- • Your problem is causing financial difficulty for you,
erence to receive notices, letters, or other written commu- your family, or your business;
nications from the IRS in an alternative language. You
• You face (or your business is facing) an immediate
may not immediately receive written communications in
threat of adverse action; or
the requested language. The IRS’s commitment to LEP
taxpayers is part of a multi-year timeline that is scheduled • You’ve tried repeatedly to contact the IRS but no one
to begin providing translations in 2023. You will continue has responded, or the IRS hasn’t responded by the
to receive communications, including notices and letters date promised.
in English until they are translated to your preferred lan-
guage. How Can You Reach TAS?

Contacting your local IRS office. Keep in mind, many TAS has offices in every state, the District of Columbia,
questions can be answered on IRS.gov without visiting an and Puerto Rico. Your local advocate’s number is in your
IRS TAC. Go to IRS.gov/LetUsHelp for the topics people local directory and at TaxpayerAdvocate.IRS.gov/
ask about most. If you still need help, IRS TACs provide Contact-Us. You can also call them at 877-777-4778.
tax help when a tax issue can’t be handled online or by
phone. All TACs now provide service by appointment, so
How Else Does TAS Help Taxpayers?
you’ll know in advance that you can get the service you
need without long wait times. Before you visit, go to
TAS works to resolve large-scale problems that affect
IRS.gov/TACLocator to find the nearest TAC and to check
many taxpayers. If you know of one of these broad issues,
hours, available services, and appointment options. Or,
report it to them at IRS.gov/SAMS.
on the IRS2Go app, under the Stay Connected tab,
choose the Contact Us option and click on “Local Offices.”
TAS for Tax Professionals

The Taxpayer Advocate Service (TAS) TAS can provide a variety of information for tax professio-
Is Here To Help You nals, including tax law updates and guidance, TAS pro-
grams, and ways to let TAS know about systemic prob-
What Is TAS?
lems you’ve seen in your practice.
TAS is an independent organization within the IRS that
helps taxpayers and protects taxpayer rights. Their job is Low Income Taxpayer Clinics (LITCs)
to ensure that every taxpayer is treated fairly and that you
know and understand your rights under the Taxpayer Bill LITCs are independent from the IRS. LITCs represent in-
of Rights. dividuals whose income is below a certain level and need
to resolve tax problems with the IRS, such as audits, ap-
How Can You Learn About Your Taxpayer peals, and tax collection disputes. In addition, LITCs can
Rights? provide information about taxpayer rights and responsibili-
ties in different languages for individuals who speak Eng-
The Taxpayer Bill of Rights describes 10 basic rights that lish as a second language. Services are offered for free or
all taxpayers have when dealing with the IRS. Go to a small fee for eligible taxpayers. To find an LITC near
TaxpayerAdvocate.IRS.gov to help you understand what you, go to TaxpayerAdvocate.IRS.gov/about-us/Low-
these rights mean to you and how they apply. These are Income-Taxpayer-Clinics-LITC or see IRS Pub. 4134, Low
your rights. Know them. Use them. Income Taxpayer Clinic List.

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                     To help us develop a more useful index, please let us know if you have ideas for index entries.
Index                See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.
 
                                       CSF 1099-R   5                   Refund of contributions         3
A                                      W-4P   4                         Retirees, rules for 5
Alternative annuity option:                                             Retirement during the past year                        10
  Lump-sum payment      7            G                                  Rollovers:
Annual leave 10                      General Rule   7 25,                Nonspouse beneficiary          16
Annuity:                             Gift tax 10                         Rollover rules 14
  Starting date 5                                                        SIMPLE retirement accounts                      14
  Statement 5                        I                                   To Roth IRAs   17
  With survivor benefit 21           Income in respect of a decedent 27 Roth Thrift Savings Plan         13
  Without survivor benefit 6         Income tax withholding  3 19, 
Assistance (See Tax help)                                               S
                                     L                                  SIMPLE retirement accounts                       14
B                                    Lump-sum CSRS or FERS              Simplified Method   6 25, 
Benefits, how to report   18           payment   23 26,                 Substantial gainful activity                     19
                                     Lump-sum payment:                  Survivor annuity 6 21 25, , 
C                                      Alternative annuity option 7     Survivors of federal employees                         20
Child's temporary annuity    21        Installments 9                   Survivors of federal retirees                    25
Community property laws      10        Withholding  4
Contributions, refund of   3                                            T
Cost (contributions to retirement    M                                  Tax help 29
  plan) 5                            Mandatory retirement age     20    Thrift Savings Plan 2 13, 
Credit for the elderly or the        Marital deduction  25               Roth option 13
  disabled 19                        Minimum retirement age    18
                                                                        U
D                                    N                                  Uniformed services Thrift Savings 
Death benefit  20                    Nonresident alien retiree 12        Plan 2
Deduction for estate tax   27                                           Unused annual leave  19
Disability retirement 18             P
Disabled child  23                   Permanently and totally            V
Distributions:                         disabled  19                     Voluntary contributions         10 24 26,          , 
  Qualified domestic relations order Physician's statement   20
  (QDRO)     16                      Public safety officers:            W
  Withholding from TSP payments 4      Dependents   20                  Withholding certificate         4
                                       Insurance premiums  17           Withholding of income tax                        3 19, 
E                                      Survivors 23                     Worksheets:
Estate tax 25 27,                    Publications (See Tax help)         Lump-sum payment at end of 
Estimated tax   3 4,                                                     survivor annuity    23
                                     Q                                   Lump-sum payment to the estate or 
F                                    Qualified domestic relations order  other beneficiary   26
Federal Employees' Compensation        (QDRO)    16                      Lump-sum payment under 
  Act (FECA)   19                    Qualified public safety             alternative annuity option                      29
Filing requirements  4                 employees    2                    Nonresident alien retiree       12
Form:                                                                    Simplified Method  28
  1099-R 4                           R
  CSA 1099-R    3                    Reemployment after retirement   12

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