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           Department of the Treasury                         Contents
           Internal Revenue Service
                                                              Future Developments . . . . . . . . . . . . . . . . . . . . . . .          1
                                                              What’s New   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Publication 575
Cat. No. 15142B                                               Reminders    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
                                                              Introduction   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
                                                              General Information . . . . . . . . . . . . . . . . . . . . . . . .        4
Pension and 
                                                              Variable Annuities . . . . . . . . . . . . . . . . . . . . . . . .         5
                                                              Section 457 Deferred Compensation Plans . . . . . .                        5
Annuity                                                       Disability Pensions          . . . . . . . . . . . . . . . . . . . . . . . 6
                                                              Insurance Premiums for Retired Public Safety 
                                                                    Officers   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Income                                                        Railroad Retirement Benefits . . . . . . . . . . . . . . . .               6
                                                              Withholding Tax and Estimated Tax                    . . . . . . . . . . . 9
For use in preparing
                                                              Cost (Investment in the Contract)                . . . . . . . . . . . .   10
2023 Returns                                                  Taxation of Periodic Payments . . . . . . . . . . . . . . .                11
                                                              Fully Taxable Payments . . . . . . . . . . . . . . . . . . .               12
                                                              Partly Taxable Payments . . . . . . . . . . . . . . . . . .                12
                                                              Taxation of Nonperiodic Payments . . . . . . . . . . . .                   14
                                                              Figuring the Taxable Amount . . . . . . . . . . . . . . .                  16
                                                              Loans Treated as Distributions . . . . . . . . . . . . . .                 18
                                                              Transfers of Annuity Contracts . . . . . . . . . . . . . .                 19
                                                              Lump-Sum Distributions               . . . . . . . . . . . . . . . . . .   20
                                                              Rollovers    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
                                                              Special Additional Taxes           . . . . . . . . . . . . . . . . . . .   33
                                                              Tax on Early Distributions             . . . . . . . . . . . . . . . . .   33
                                                              Tax on Excess Accumulation . . . . . . . . . . . . . . .                   37
                                                              Survivors and Beneficiaries . . . . . . . . . . . . . . . . .              38
                                                              Disaster-Related Relief        . . . . . . . . . . . . . . . . . . . . .   39
                                                              Qualified Disaster Recovery Distributions . . . . . .                      40
                                                              Taxation of Qualified Disaster Distributions . . . . .                     41
                                                              Repayment of Qualified Disaster Distributions . . .                        41
                                                              Recontribution of Qualified Distributions for 
                                                                    the Purchase or Construction of a Main 
                                                                    Home     . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   42
                                                              Loans From Qualified Plans . . . . . . . . . . . . . . . .                 42
                                                              How To Get Tax Help        . . . . . . . . . . . . . . . . . . . . . . .   44
                                                              Worksheet A. Simplified Method                 . . . . . . . . . . . . .   49
                                                              Recapture Allocation Chart             . . . . . . . . . . . . . . . . .   50
                                                              Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  51

                                                              Future Developments
                                                              For  the  latest  information  about  developments  related  to 
Get forms and other information faster and easier at:         Pub.  575,  such  as  legislation  enacted  after  it  was 
• IRS.gov (English)         • IRS.gov/Korean (한국어)            published, go to IRS.gov/Pub575.
• IRS.gov/Spanish (Español) • IRS.gov/Russian (Pусский) 
• IRS.gov/Chinese (中文)      • IRS.gov/Vietnamese (Tiếng Việt) 

Mar 7, 2024

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What’s New Introduction
Distributions to victims of domestic abuse. For tax This publication discusses the tax treatment of distribu-
years beginning after December 31, 2023, a distribution to tions you receive from pension and annuity plans and also
a domestic abuse victim is not subject to the 10% addi- shows you how to report the income on your federal in-
tional tax on early distributions if the distribution is made come tax return. How these distributions are taxed de-
from an applicable eligible retirement plan and made to an pends on whether they are periodic payments (amounts
individual during the 1-year period beginning on the date received as an annuity) that are paid at regular intervals
on which the individual is a victim of domestic abuse by a over several years or nonperiodic payments (amounts not
spouse or domestic partner. received as an annuity).
An eligible distribution to a domestic abuse victim must
not exceed the lesser of $10,000 or 50% of the present What is covered in this publication? This publication
value of the nonforfeitable accrued benefit of the em- contains information that you need to understand the fol-
ployee under the plan. lowing topics.
The distribution may be repaid at any time during the • How to figure the tax-free part of periodic payments
3-year period beginning on the day after the date on which under a pension or annuity plan, including using a
the distribution was received. simple worksheet for payments under a qualified plan.
• How to figure the tax-free part of nonperiodic pay-
ments from qualified and nonqualified plans, and how
to use the optional methods to figure the tax on
Reminders
lump-sum distributions from pension, stock bonus,
The direct payment requirement for certain distribu- and profit-sharing plans.
tions for payment of health or long-term care insur- How to roll over certain distributions from a retirement
•
ance repealed. Distributions from governmental plans to plan into another retirement plan or IRA.
an eligible retired public safety officer made after Decem-
ber 29, 2022, for health and long-term care insurance can • How to report disability payments, and how beneficia-
be excluded from that employee’s gross income. ries and survivors of employees and retirees must re-
These distributions are excluded from gross income port benefits paid to them.
whether the premiums are paid directly to the provider of • How to report railroad retirement benefits.
the accident or health plan or qualified long-term care in-
surance contract by deduction from a distribution from the • When additional taxes on certain distributions may ap-
ply (including the tax on early distributions and the tax
eligible retirement plan or if the distributions are made to
on excess accumulation).
the employee.
The amount which may be excluded from gross income For additional information on how to report pen-
for the tax year can’t exceed the lesser of $3,000 or the TIP sion or annuity payments on your federal income
amount paid for the insurance. tax return, be sure to review the instructions on
the back of Copies B, C, and 2 of the Form 1099-R, Distri-
Form 8915-F replaces Form 8915-E. Form 8915-F, butions From Pensions, Annuities, Retirement or
Qualified Disaster Retirement Plan Distributions and Re- Profit-Sharing Plans, IRAs, Insurance Contracts, etc., that
payments, replaces Form 8915-E for reporting qualified you received and the instructions for Form 1040, lines 5a
2020 disaster distributions and repayments of those distri- and 5b, and the instructions for Form 1040-NR, lines 5a
butions made in 2021, 2022, and 2023, as applicable. In and 5b.
previous years, distributions and repayments would be re-
ported on the applicable Form 8915 for that year's disas- A “corrected” Form 1099-R replaces the corre-
ters. For example, Form 8915-D, Qualified 2019 Disaster ! sponding original Form 1099-R if the original
Retirement Plan Distributions and Repayments, would be CAUTION Form 1099-R contained an error. Make sure you
used to report qualified 2019 disaster distributions and re- use the amounts shown on the corrected Form 1099-R
payments. when reporting information on your tax return.
Form 8915-F is a forever form. Beginning in 2021, addi-
tional alphabetical Forms 8915 will not be issued. For What isn't covered in this publication? The following
more information, see the Instructions for Form 8915-F. topics aren't discussed in this publication.
Photographs of missing children. The IRS is a proud The General Rule. This is the method generally used
partner with the National Center for Missing & Exploited to determine the tax treatment of pension and annuity in-
Children® (NCMEC). Photographs of missing children se- come from nonqualified plans (including commercial an-
lected by the Center may appear in this publication on pa- nuities). For a qualified plan, you can’t generally use the
ges that would otherwise be blank. You can help bring General Rule unless your annuity starting date is before
these children home by looking at the photographs and November 19, 1996. Although this publication will help
calling 1-800-THE-LOST (1-800-843-5678) if you recog- you determine whether you can use the General Rule, it
nize a child. won't help you use it to determine the tax treatment of your

2 Publication 575 (2023)

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pension or annuity income. For that and other information Ordering tax forms, instructions, and publications.
on the General Rule, see Pub. 939, General Rule for Pen- Go to IRS.gov/OrderForms to order current forms, instruc-
sions and Annuities. tions, and publications; call 800-829-3676 to order
prior-year forms and instructions. The IRS will process
Individual retirement arrangements (IRAs). Infor-
your order for forms and publications as soon as possible.
mation on the tax treatment of amounts you receive from
Don’t resubmit requests you’ve already sent us. You can
an IRA is in Pub. 590-B.
get forms and publications faster online.
Civil service retirement benefits. If you are retired
from the federal government (regular, phased, or disability Useful Items
retirement) or are the survivor or beneficiary of a federal You may want to see:
employee or retiree who died, see Pub. 721, Tax Guide to
U.S. Civil Service Retirement Benefits. Pub. 721 covers Publication
the tax treatment of federal retirement benefits, primarily
505
those paid under the Civil Service Retirement System 505 Tax Withholding and Estimated Tax
(CSRS) or the Federal Employees' Retirement System 524 524 Credit for the Elderly or the Disabled
(FERS). It also covers benefits paid from the Thrift Sav-
ings Plan (TSP). 525 525 Taxable and Nontaxable Income
Social security and equivalent tier 1 railroad retire- 560 560 Retirement Plans for Small Business (SEP,
ment benefits. For information about the tax treatment of SIMPLE, and Qualified Plans)
these benefits, see Pub. 915, Social Security and Equiva- 571 571 Tax-Sheltered Annuity Plans (403(b) Plans)
lent Railroad Retirement Benefits. However, this publica-
tion (575) covers the tax treatment of the non-social secur- 590-A 590-A Contributions to Individual Retirement
ity equivalent benefit portion of tier 1 railroad retirement Arrangements (IRAs)
benefits, tier 2 benefits, vested dual benefits, and supple-
mental annuity benefits paid by the U.S. Railroad Retire- 590-B 590-B Distributions from Individual Retirement
ment Board. Arrangements (IRAs)
Tax-sheltered annuity plans (403(b) plans). If you 721 721 Tax Guide to U.S. Civil Service Retirement
work for a public school or certain tax-exempt organiza- Benefits
tions, you may be eligible to participate in a 403(b) retire- 907 907 Tax Highlights for Persons With Disabilities
ment plan offered by your employer. Although this publica-
tion covers the treatment of benefits under 403(b) plans 915 915 Social Security and Equivalent Railroad
and discusses in-plan Roth rollovers from 403(b) plans to Retirement Benefits
designated Roth accounts, it doesn't cover other tax provi-
939
sions that apply to these plans. For that and other informa- 939 General Rule for Pensions and Annuities
tion on 403(b) plans, see Pub. 571. 976 976 Disaster Relief

Comments and suggestions. We welcome your com- Form (and Instructions)
ments about this publication and suggestions for future
editions. W-4P W-4P Withholding Certificate for Pension or Annuity
You can send us comments through IRS.gov/ Payments
FormComments. Or, you can write to the Internal Revenue W-4R W-4R Withholding Certificate for Nonperiodic
Service, Tax Forms and Publications, 1111 Constitution
Payments and Eligible Rollover Distributions
Ave. NW, IR-6526, Washington, DC 20224.
Although we can’t respond individually to each com- 1099-R 1099-R Distributions From Pensions, Annuities,
ment received, we do appreciate your feedback and will Retirement or Profit-Sharing Plans, IRAs,
consider your comments and suggestions as we revise Insurance Contracts, etc.
our tax forms, instructions, and publications. Don’t send 4972 4972 Tax on Lump-Sum Distributions
tax questions, tax returns, or payments to the above ad-
dress. 5329 5329 Additional Taxes on Qualified Plans (Including
Getting answers to your tax questions. If you have IRAs) and Other Tax-Favored Accounts
a tax question not answered by this publication or the How 8915-C 8915-C Qualified 2018 Disaster Retirement Plan
To Get Tax Help section near the end of this publication, Distributions and Repayments
go to the IRS Interactive Tax Assistant page at IRS.gov/
Help/ITA where you can find topics by using the search 8915-D 8915-D Qualified 2019 Disaster Retirement Plan
feature or viewing the categories listed. Distributions and Repayments
Getting tax forms, instructions, and publications. 8915-F 8915-F Qualified Disaster Retirement Plan
Go to IRS.gov/Forms to download current and prior-year Distributions and Repayments
forms, instructions, and publications.
See How To Get Tax Help near the end of this publication
for information about getting publications and forms.

Publication 575 (2023) 3

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Annuities for a single life. You receive definite
amounts at regular intervals for life. The payments end at
General Information death.
Definitions. Some of the terms used in this publication Joint and survivor annuities. The first annuitant re-
are defined in the following paragraphs. ceives a definite amount at regular intervals for life. After
they die, a second annuitant receives a definite amount at
Pension. A pension is generally a series of definitely regular intervals for life. The amount paid to the second
determinable payments made to you after you retire from annuitant may or may not differ from the amount paid to
work. Pension payments are made regularly and are the first annuitant.
based on such factors as years of service and prior com-
pensation. Variable annuities. You receive payments that may
vary in amount for a specified length of time or for life. The
Annuity. An annuity is a series of payments under a amounts you receive may depend upon such variables as
contract made at regular intervals over a period of more profits earned by the pension or annuity funds, cost-of-liv-
than 1 full year. They can be either fixed (under which you ing indexes, or earnings from a mutual fund.
receive a definite amount) or variable (not fixed). You can
buy the contract alone or with the help of your employer. Disability pensions. You receive disability payments
because you retired on disability and haven't reached min-
Qualified employee plan. A qualified employee plan imum retirement age.
is an employer's stock bonus, pension, or profit-sharing
plan that is for the exclusive benefit of employees or their More than one program. You may receive employee
beneficiaries and that meets Internal Revenue Code re- plan benefits from more than one program under a single
quirements. It qualifies for special tax benefits, such as tax trust or plan of your employer. If you participate in more
deferral for employer contributions and capital gain treat- than one program, you may have to treat each as a sepa-
ment or the 10-year tax option for lump-sum distributions rate pension or annuity contract, depending upon the facts
(if participants qualify). To determine whether your plan is in each case. Also, you may be considered to have re-
a qualified plan, check with your employer or the plan ad- ceived more than one pension or annuity. Your former em-
ministrator. ployer or the plan administrator should be able to tell you if
Qualified employee annuity. A qualified employee you have more than one contract.
annuity is a retirement annuity purchased by an employer
Example. Your employer set up a noncontributory
for an employee under a plan that meets Internal Revenue
profit-sharing plan for its employees. The plan provides
Code requirements.
that the amount held in the account of each participant will
Designated Roth account. A designated Roth ac- be paid when that participant retires. Your employer also
count is a separate account created under a qualified set up a contributory defined benefit pension plan for its
Roth contribution program to which participants may elect employees providing for the payment of a lifetime pension
to have part or all of their elective deferrals to a 401(k), to each participant after retirement.
403(b), or 457(b) plan designated as Roth contributions. The amount of any distribution from the profit-sharing
In addition, a designated Roth account may include cer- plan depends on the contributions (including allocated for-
tain nonelective contributions or matching contributions feitures) made for the participant and the earnings from
that a participant designates as Roth contributions. those contributions. Under the pension plan, however, a
Designated Roth contributions, designated Roth non- formula determines the amount of the pension benefits.
elective contributions, and designated Roth matching con- The amount of contributions is the amount necessary to
tributions are included in your income. However, qualified provide that pension.
distributions (explained later) aren't included in your in- Each plan is a separate program and a separate con-
come. tract. If you get benefits from these plans, you must ac-
You should check with your plan administrator to deter- count for each separately, even though the benefits from
mine if your plan will accept designated Roth contribu- both may be included in the same check.
tions. Distributions from a designated Roth account are
Tax-sheltered annuity plan. A tax-sheltered annuity ! treated separately from other distributions from
plan (often referred to as a “403(b) plan” or a “tax-deferred CAUTION the plan.
annuity plan)” is a retirement plan for employees of public
schools and certain tax-exempt organizations. Generally, Qualified domestic relations order (QDRO). A QDRO
a tax-sheltered annuity plan provides retirement benefits is a judgment, decree, or order relating to payment of child
by purchasing annuity contracts for its participants. support, alimony, or marital property rights to a spouse,
former spouse, child, or other dependent of a participant
Types of pensions and annuities. Pensions and annui- in a retirement plan. The QDRO must contain certain spe-
ties include the following types. cific information, such as the name and last known mailing
Fixed-period annuities. You receive definite address of the participant and each alternate payee, and
amounts at regular intervals for a specified length of time. the amount or percentage of the participant's benefits to
be paid to each alternate payee. A QDRO may not award

4 Publication 575 (2023)

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an amount or form of benefit that isn't available under the The amount you receive in a full surrender of your an-
plan. nuity contract at any time is tax free to the extent of any
A spouse or former spouse who receives part of the cost that you haven't previously recovered tax free. The
benefits from a retirement plan under a QDRO reports the rest is taxable.
payments received as if they were a plan participant. The For more information on the tax treatment of withdraw-
spouse or former spouse is allocated a share of the partic- als, see Taxation of Nonperiodic Payments, later. If you
ipant's cost (investment in the contract) equal to the cost withdraw funds from your annuity before you reach age
times a fraction. The numerator of the fraction is the 59 / , also see 1 2 Tax on Early Distributions under Special
present value of the benefits payable to the spouse or for- Additional Taxes, later.
mer spouse. The denominator is the present value of all
benefits payable to the participant. Annuity payments. If you receive annuity payments un-
A distribution that is paid to a child or other dependent der a variable annuity plan or contract, you recover your
under a QDRO is taxed to the plan participant. cost tax free under either the Simplified Method or the
General Rule, as explained under Taxation of Periodic
Payments, later. For a variable annuity paid under a quali-
Variable Annuities fied plan, you must generally use the Simplified Method.
The tax rules in this publication apply both to annuities For a variable annuity paid under a nonqualified plan (in-
that provide fixed payments and to annuities that provide cluding a contract you bought directly from the issuer), you
payments that vary in amount based on investment results must use a special computation under the General Rule.
or other factors. For example, they apply to commercial For more information, see Variable annuities under Com-
variable annuity contracts, whether bought by an em- putation Under the General Rule in Pub. 939.
ployee retirement plan for its participants or bought di-
Death benefits. If you receive a single-sum distribution
rectly from the issuer by an individual investor. Under
from a variable annuity contract because of the death of
these contracts, the owner can generally allocate the pur-
the owner or annuitant, the distribution is generally taxable
chase payments among several types of investment port-
only to the extent it is more than the unrecovered cost of
folios or mutual funds and the contract value is determined
the contract. If you choose to receive an annuity, the pay-
by the performance of those investments. The earnings
ments are subject to tax as described above. If the con-
aren't taxed until distributed either in a withdrawal or in an-
tract provides a joint and survivor annuity and the primary
nuity payments. The taxable part of a distribution is trea-
annuitant had received annuity payments before death,
ted as ordinary income.
you figure the tax-free part of annuity payments you re-
For information on the tax treatment of a transfer or ex- ceive as the survivor in the same way the primary annui-
change of a variable annuity contract, see Transfers of An- tant did. See Survivors and Beneficiaries, later.
nuity Contracts under Taxation of Nonperiodic Payments,
later. Section 457 Deferred Compensation
Net Investment Income Tax (NIIT). Annuities under a Plans
nonqualified plan are included in calculating your net in-
vestment income for the NIIT. See Form 8960, Net Invest- If you work for a state or local government or for a tax-ex-
ment Income Tax—Individuals, Estates, and Trusts, and its empt organization, you may be able to participate in a sec-
instructions for more information. tion 457 deferred compensation plan. If your plan is an eli-
gible plan, you aren't taxed currently on pay that is
Withdrawals. If you withdraw funds before your annuity deferred under the plan or on any earnings from the plan's
starting date and your annuity is under a qualified retire- investment of the deferred pay. You are generally taxed on
ment plan, a ratable part of the amount withdrawn is tax amounts deferred in an eligible state or local government
free. The tax-free part is based on the ratio of your cost plan only when they are distributed from the plan. You are
(investment in the contract) to your account balance under taxed on amounts deferred in an eligible tax-exempt or-
the plan. ganization plan when they are distributed or otherwise
If your annuity is under a nonqualified plan (including a made available to you.
contract you bought directly from the issuer), the amount
withdrawn is allocated first to earnings (the taxable part) Your 457(b) plan may have a designated Roth account
and then to your cost (the tax-free part). However, if you option. If so, you may be able to roll over amounts to the
bought your annuity contract before August 14, 1982, a designated Roth account or make contributions. Contribu-
different allocation applies to the investment before that tions to a designated Roth account are included in your in-
date and the earnings on that investment. To the extent come. Qualified distributions (explained later) aren't inclu-
the amount withdrawn doesn't exceed that investment and ded in your income. See Designated Roth accounts under
earnings, it is allocated first to your cost (the tax-free part) Taxation of Periodic Payments, later.
and then to earnings (the taxable part). This publication covers the tax treatment of benefits un-
If you withdraw funds (other than as an annuity) on or der eligible section 457 plans, but it doesn't cover the
after your annuity starting date, the entire amount with- treatment of deferrals. For information on deferrals under
drawn is generally taxable. section 457 plans, see Retirement Plan Contributions un-
der Employee Compensation in Pub. 525.

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Is your plan eligible? To find out if your plan is an eligi- • The Foreign Service.
ble plan, check with your employer. Plans that aren’t eligi-
ble section 457 plans include the following. Insurance Premiums for Retired
• Bona fide vacation leave, sick leave, compensatory Public Safety Officers
time, severance pay, disability pay, or death benefit
plans. If you are an eligible retired public safety officer (law en-
• Nonelective deferred compensation plans for nonem- forcement officer, firefighter, chaplain, or member of a res-
ployees (independent contractors). cue squad or ambulance crew who is retired because of
disability or because you reached normal retirement age),
• Deferred compensation plans maintained by you can elect to exclude from income distributions made
churches. from your eligible retirement plan that are used to pay the
• Length of service award plans for bona fide volunteer premiums for coverage by an accident or health plan or a
firefighters and emergency medical personnel. An ex- long-term care insurance contract. The premiums can be
ception applies if the total amount paid to a volunteer for coverage for you, your spouse, or dependents.
exceeds $7,000 for any year of service. The distribution must be from the plan maintained by
the employer from which you retired as a public safety offi-
Disability Pensions cer. The distribution can be made directly from the plan to
the provider of the accident or health plan or long-term
If you retired on disability, you must generally include in in- care insurance contract, or the distribution can be made to
come any disability pension you receive under a plan that you to pay to the provider of the accident or health plan or
is paid for by your employer. You must report your taxable long-term care insurance contract.
disability payments as wages on Form 1040, 1040-SR, or
1040-NR, line 1h, until you reach minimum retirement age. You can exclude from income the smaller of the amount
Minimum retirement age is generally the age at which you of the insurance premiums or $3,000. You can make this
can first receive a pension or annuity if you aren't disa- election only for amounts that would otherwise be inclu-
bled. ded in your income. The amount excluded from your in-
come can't be used to claim a medical expense deduc-
You may be entitled to a tax credit if you were per- tion.
TIP manently and totally disabled when you retired.
For information on this credit, see Pub. 524. An eligible retirement plan is a governmental plan that
is a:
Beginning on the day after you reach minimum retire-
ment age, payments you receive are taxable as a pension • Qualified trust,
or annuity. When you receive pension or annuity pay- • Section 403(a) plan,
ments, you are able to recover your cost or investment.
• Section 403(b) annuity, or
Your cost is generally your net investment in the plan as of
your annuity starting date. It doesn't include pre-tax contri- • Section 457(b) plan.
butions. For more information, see Cost (Investment in the
If you make this election, reduce the otherwise taxable
Contract) and Taxation of Periodic Payments, later.
amount of your pension or annuity by the amount exclu-
Report the payments on Form 1040, 1040-SR, or ded. The amount shown in box 2a of Form 1099-R doesn't
1040-NR, lines 5a and 5b. reflect this exclusion. Report your total distributions on
Disability payments for injuries incurred as a di- Form 1040, 1040-SR, or 1040-NR, line 5a. Report the tax-
TIP rect result of a terrorist attack directed against the able amount on Form 1040, 1040-SR, or 1040-NR,
United States (or its allies) aren't included in in- line 5b. Enter “PSO” next to the appropriate line on which
come. For more information about payments to survivors you report the taxable amount.
of terrorist attacks, see Pub. 3920, Tax Relief for Victims of If you are retired on disability and reporting your disabil-
Terrorist Attacks, and Pub. 907. ity pension on Form 1040, 1040-SR, or 1040-NR, line 1h,
include only the taxable amount on that line and enter
Military and government disability pensions. Certain “PSO” and the amount excluded on the dotted line next to
military and government disability pensions aren’t taxable. the applicable line.
Service-connected disability. You may be able to ex-
clude from income amounts you receive as a pension, an- Railroad Retirement Benefits
nuity, or similar allowance for personal injury or sickness
resulting from active service in one of the following gov- Benefits paid under the Railroad Retirement Act fall into
ernment services. two categories. These categories are treated differently for
income tax purposes.
• The armed forces of any country.
The first category is the amount of tier 1 railroad retire-
• The National Oceanic and Atmospheric Administra- ment benefits that equals the social security benefit that a
tion. railroad employee or beneficiary would have been entitled
• The Public Health Service. to receive under the social security system. This part of

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the tier 1 benefit is the social security equivalent benefit contact your nearest RRB field office if you reside in the
(SSEB) and you treat it for tax purposes as social security United States (call 877-772-5772 for the nearest field of-
benefits. If you received, repaid, or had tax withheld from fice) or U.S. Consulate/Embassy if you reside outside the
the SSEB portion of tier 1 benefits during 2023, you will re- United States. You can visit the RRB on the Internet at
ceive Form RRB-1099, Payments by the Railroad Retire- RRB.gov.
ment Board (or Form RRB-1042S, Statement for Nonresi-
dent Alien Recipients of Payments by the Railroad Form RRB-1099-R. The following discussion explains
Retirement Board, if you are a nonresident alien) from the the items shown on Form RRB-1099-R. The amounts
U.S. Railroad Retirement Board (RRB). shown on this form are before any deduction for:
For more information about the tax treatment of the • Federal income tax withholding;
SSEB portion of tier 1 benefits and Forms RRB-1099 and • Medicare premiums;
RRB-1042S, see Pub. 915.
• Legal process garnishment payments;
The second category contains the rest of the tier 1 rail- • Recovery of a prior-year overpayment of an NSSEB,
road retirement benefits called the non-social security tier 2 benefit, VDB, or supplemental annuity benefit; or
equivalent benefit (NSSEB). It also contains any tier 2
benefit, vested dual benefit (VDB), and supplemental an- • Recovery of Railroad Unemployment Insurance Act
nuity benefit. Treat this category of benefits, shown on benefits received while awaiting payment of your rail-
Form RRB-1099-R, as an amount received from a quali- road retirement annuity.
fied employee plan. This allows for the tax-free (nontaxa- The amounts shown on this form are after any offset
ble) recovery of employee contributions from the tier 2 for:
benefits and the NSSEB part of the tier 1 benefits. (The
NSSEB and tier 2 benefits, less certain repayments, are • Social security benefits;
combined into one amount called the Contributory • Age reduction;
Amount Paid on Form RRB-1099-R.) VDBs and supple- Public service pensions or public disability benefits;
•
mental annuity benefits are non-contributory pensions and
are fully taxable. See Taxation of Periodic Payments, later, • Dual railroad retirement entitlement under another
for information on how to report your benefits and how to RRB claim number;
recover the employee contributions tax free. Form • Work deductions;
RRB-1099-R is used for U.S. citizens, resident aliens, and
nonresident aliens. • Legal process partition deductions;
• Actuarial adjustment;
Nonresident aliens. A nonresident alien is an individual
who isn't a citizen or a resident alien of the United States. • Annuity waiver; or
If you are a nonresident alien, you are subject to U.S. tax • Recovery of a current-year overpayment of NSSEB,
on your SSEB portion of tier 1 benefits at a 30% rate, un- tier 2 benefits, VDB, or supplemental annuity benefits.
less exempt or subject to a lower treaty rate. See Pub.
The amounts shown on Form RRB-1099-R don't reflect
519, U.S. Tax Guide for Aliens, for more information.
any special rules, such as capital gain treatment or the
If your rate of tax changed or your country of legal resi-
special 10-year tax option for lump-sum payments, or
dence changed during the tax year, you may receive more
tax-free rollovers. To determine if any of these rules apply
than one Form RRB-1042S or RRB-1099-R. To determine
to your benefits, see the discussions about them later.
your total benefits paid or repaid and total tax withheld for
Generally, amounts shown on your Form RRB-1099-R
the year, you should add the amounts shown on all forms
are considered a normal distribution. Use distribution
you received for that year.
code “7” if you are asked for a distribution code. Distribu-
Tax withholding. To request or change your income tax tion codes aren't shown on Form RRB-1099-R.
withholding from SSEB payments, U.S. citizens should There are three copies of this form. Copy B is to be in-
contact the IRS for Form W-4V, Voluntary Withholding Re- cluded with your income tax return if federal income tax is
quest, and file it with the RRB. To elect, revoke, or change withheld. Copy C is for your own records. Copy 2 is filed
your income tax withholding from NSSEB, tier 2, VDB, and with your state, city, or local income tax return when re-
supplemental annuity payments received, use Form RRB quired. See the illustrated Copy B (Form RRB-1099-R),
W-4P, Withholding Certificate for Railroad Retirement Pay- later.
ments. If you are a nonresident alien or a U.S. citizen living Each beneficiary will receive their own Form
abroad, you should provide Form RRB-1001, Nonresident TIP RRB-1099-R. If you receive benefits on more than
Questionnaire, to the RRB to furnish citizenship and resi- one railroad retirement record, you may get more
dency information and to claim any treaty exemption from than one Form RRB-1099-R. So that you get your form
U.S. tax withholding. Nonresident U.S. citizens can't elect timely, make sure the RRB always has your current mailing
to be exempt from withholding on payments delivered out- address.
side the United States.

Help from the RRB. To request an RRB form or to get Box 1—Claim Number and Payee Code. Your claim
help with questions about an RRB benefit, you should number is a six- or nine-digit number preceded by an

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PAYER’S NAME, STREET ADDRESS, CITY, STATE, AND ZIP CODE ANNUITIES OR PENSIONS BY THE
UNITED STATES RAILROAD RETIREMENT BOARD RAILROAD RETIREMENT BOARD
2023
844 N RUSH ST CHICAGO IL 60611-1275 3. Employee Contributions
PAYER’S FEDERAL IDENTIFYING NO. 36-3314600
1. Claim Number and Payee Code 4. Contributory Amount Paid
COPY B -
2. Recipient’s Number 5. Vested Dual
REPORT THIS INCOME ON
YOUR FEDERAL TAX
Recipient’s Name, Street Address, City, State, and Zip Code 6. Supplemental Annuity RETURN. IF THIS FORM
SHOWS FEDERAL INCOME
7. Total Gross Paid TAX WITHHELD IN BOX 9,
(Sum of boxes 4, 5, and 6) ATTACH THIS COPY TO
8. Repayments YOUR RETURN.
THIS INFORMATION IS BEING
9. Federal Income Tax FURNISHED TO THE INTERNAL
Withheld REVENUE SERVICE.
10. Medicare Premium Total

FORM RRB-1099-R
alphabetical prefix. This is the number under which the If you had a previous annuity entitlement that
RRB paid your benefits. Your payee code follows your ! ended and you are figuring the tax-free part of
claim number and is the last number in this box. It is used CAUTION your NSSEB/tier 2 benefit for your current annuity
by the RRB to identify you under your claim number. In all entitlement, you should contact the RRB for confirmation
your correspondence with the RRB, be sure to use the of your correct employee contribution amount.
claim number and payee code shown in this box.
Box 4—Contributory Amount Paid. This is the gross
Box 2—Recipient's Identification Number. This is
amount of the NSSEB and tier 2 benefit you received in
the recipient's U.S. taxpayer identification number (TIN). It
2023, less any 2023 benefits you repaid in 2023. (Any
is the social security number (SSN), individual taxpayer
benefits you repaid in 2023 for an earlier year or for an un-
identification number (ITIN), or employer identification
known year are shown in box 8.) This amount is the total
number (EIN), if known, for the person or estate listed as
contributory pension paid in 2023. It may be partly taxable
the recipient.
and partly tax free or fully taxable. If you determine you are
If you are a resident or nonresident alien who eligible to compute a tax-free part, as explained later in
TIP must furnish a TIN to the IRS and aren’t eligible to Partly Taxable Payments under Taxation of Periodic Pay-
obtain an SSN, use Form W-7, Application for IRS ments, use the latest reported employee contribution
Individual Taxpayer Identification Number, to apply for an amount shown in box 3 as the cost.
ITIN. The Instructions for Form W-7 explain how and when
Box 5—Vested Dual Benefit. This is the gross
to apply.
amount of VDB payments paid in 2023, less any 2023
VDB payments you repaid in 2023. It is fully taxable. VDB
Box 3—Employee Contributions. This is the amount
payments you repaid in 2023 for an earlier year or for an
of taxes withheld from the railroad employee's earnings
unknown year are shown in box 8.
that exceeds the amount of taxes that would have been
withheld had the earnings been covered under the social Note. The amounts shown in boxes 4 and 5 may repre-
security system. This amount is the employee's cost that sent payments for 2023 and/or other years after 1983.
you use to figure the tax-free part of the NSSEB and tier 2
benefit you received (the amount shown in box 4). (For in- Box 6—Supplemental Annuity. This is the gross
formation on how to figure the tax-free part, see Partly amount of supplemental annuity benefits paid in 2023,
Taxable Payments under Taxation of Periodic Payments, less any 2023 supplemental annuity benefits you repaid in
later.) The amount shown is the total employee contribu- 2022. It is fully taxable. Supplemental annuity benefits you
tion amount, not reduced by any amounts that the RRB repaid in 2023 for an earlier year or for an unknown year
calculated as previously recovered. It is the latest amount are shown in box 8.
reported for 2023 and may have increased or decreased Box 7—Total Gross Paid. This is the sum of boxes 4,
from a previous Form RRB-1099-R. If this amount has 5, and 6. The amount represents the total pension paid in
changed, the change is retroactive. You may need to refig- 2023. Include this amount on Form 1040, 1040-SR, or
ure the tax-free part of your NSSEB/tier 2 benefit for 2023 1040-NR, line 5a.
and prior tax years. If this box is blank, it means that the
amount of your NSSEB and tier 2 payments shown in Box 8—Repayments. This amount represents any
box 4 is fully taxable. NSSEB, tier 2 benefit, VDB, and supplemental annuity

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benefit you repaid to the RRB in 2023 for years before premiums by direct billing, your Medicare total won't be
2023 or for unknown years. The amount shown in this box shown in this box.
hasn't been deducted from the amounts shown in boxes 4,
5, and 6. It only includes repayments of benefits that were Repayment of benefits received in an earlier year. If
taxable to you. This means it only includes repayments in you had to repay any railroad retirement benefits that you
2023 of NSSEB paid after 1985, tier 2 benefits and VDB had included in your income in an earlier year because at
paid after 1983, and supplemental annuity benefits paid in that time you thought you had an unrestricted right to it,
any year. If you included the benefits in your income in the you can deduct the amount you repaid in the year in which
year you received them, you may be able to deduct the re- you repaid it.
paid amount. For more information about repayments, see However, if you repaid $3,000, or less, for tax years
Repayment of benefits received in an earlier year, later. 2018 through 2025, miscellaneous itemized deductions
subject to the 2%-of-adjusted-gross-income limit are sus-
You may have repaid an overpayment of benefits pended and therefore not deductible on Schedule A (Form
TIP by returning a payment, by making a payment, or 1040).
by having an amount withheld from your railroad If you repaid more than $3,000 in 2023, you can either
retirement annuity payment. take a deduction for the amount repaid on Schedule A
(Form 1040), line 16, or you can take a credit against your
Box 9—Federal Income Tax Withheld. This is the to- tax. For more information, see Repayments in Pub. 525.
tal federal income tax withheld from your NSSEB, tier 2
benefit, VDB, and supplemental annuity benefit. Include
this on your income tax return as tax withheld. If you are a Withholding Tax and Estimated Tax
nonresident alien and your tax withholding rate and/or
country of legal residence changed during 2023, you will Your retirement plan distributions are subject to federal in-
receive more than one Form RRB-1099-R for 2023. Deter- come tax withholding. However, you can choose not to
mine the total amount of U.S. federal income tax withheld have tax withheld on payments you receive unless they
from your 2023 RRB NSSEB, tier 2, VDB, and supplemen- are eligible rollover distributions. (These are distributions,
tal annuity payments by adding the amounts in box 9 of all described later under Rollovers, that are eligible for roll-
original 2023 Forms RRB-1099-R, or the latest corrected over treatment but aren't paid directly to another qualified
or duplicate Forms RRB-1099-R you receive. retirement plan or to a traditional IRA.) If you choose not to
have tax withheld or if you don't have enough tax withheld,
Box 10—Rate of Tax. If you are a nonresident alien, you may have to make estimated tax payments. See Esti-
an entry in this box indicates the rate at which tax was mated tax, later.
withheld on the NSSEB, tier 2, VDB, and supplemental
annuity payments that were paid to you in 2023. If you are The withholding rules apply to the taxable part of pay-
a nonresident alien whose tax was withheld at more than ments you receive from:
one rate during 2023, you will receive a separate Form
• An employer pension, annuity, profit-sharing, or stock
RRB-1099-R for each rate change during 2023. If you are
bonus plan;
taxed as a U.S. citizen or resident alien, this box doesn't
apply to you. • Any other deferred compensation plan;
Box 11—Country. If you are a nonresident alien, an • A traditional IRA; or
entry in this box indicates the country of which you were a • A commercial annuity.
resident for tax purposes at the time you received railroad
retirement payments in 2023. If you are a nonresident For this purpose, a commercial annuity means an annuity,
alien who was a resident of more than one country during endowment, or life insurance contract issued by an insur-
2023, you will receive a separate Form RRB-1099-R for ance company.
each country of residence during 2023. If you are taxed as There will be no withholding on any part of a distri-
a U.S. citizen or resident alien, this box doesn't apply to TIP bution where it is reasonable to believe that it
you. won't be includible in gross income.
Box 12—Medicare Premium Total. This is for infor-
mation purposes only. The amount shown in this box rep- Choosing no withholding. You can choose not to have
resents the total amount of Medicare Part B premiums de- income tax withheld from retirement plan payments unless
ducted from your railroad retirement annuity payments in they are eligible rollover distributions. You can make this
2023. Medicare premium refunds aren't included in the choice on Form W-4P for periodic payments or Form
Medicare total. The Medicare total is normally shown on W-4R for nonperiodic payments. This choice generally re-
Form RRB-1099 (if you are a citizen or resident alien of mains in effect until you revoke it.
the United States) or Form RRB-1042S (if you are a non- The payer will ignore your choice not to have tax with-
resident alien). However, if Form RRB-1099 or Form held if:
RRB-1042S isn't required for 2023, then this total will be • You don't give the payer your SSN (in the required
shown on Form RRB-1099-R. If your Medicare premiums manner); or
were deducted from your social security benefits, paid by
a third party, refunded to you, and/or you paid the • The IRS notifies the payer, before the payment is
made, that you gave an incorrect SSN.

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To choose not to have tax withheld, a U.S. citizen or Estimated tax. Your estimated tax is the total of your ex-
resident alien must give the payer a home address in the pected income tax, self-employment tax, and certain other
United States or its territories. Without that address, the taxes for the year, minus your expected credits and with-
payer must withhold tax. For example, the payer has to held tax. Generally, you must make estimated tax pay-
withhold tax if the recipient has provided a U.S. address ments for 2024 if you expect to owe at least $1,000 in tax
for a nominee, trustee, or agent to whom the benefits are (after subtracting your withholding and credits) and you
delivered, but hasn't provided their own U.S. home ad- expect your withholding and credits to be less than the
dress. smaller of:
If you don't give the payer a home address in the United
1. 90% of the tax to be shown on your 2024 return, or
States or its territories, you can choose not to have tax
withheld only if you certify to the payer that you aren't a 2. 100% of the tax shown on your 2023 return.
U.S. citizen, a U.S. resident alien, or someone who is sub-
If your adjusted gross income for 2023 was more than
ject to section 877 because you expatriated before June
$150,000 ($75,000 if your filing status for 2024 is married
17, 2008. See Form 8854 and its instructions for details
filing separately), substitute 110% for 100% in (2) above.
about section 877. But, if you so certify, you may be sub-
For more information, see Pub. 505.
ject to the 30% flat rate withholding that applies to nonres-
ident aliens. This 30% rate won't apply if you are exempt In figuring your withholding or estimated tax, re-
or subject to a reduced rate by treaty. For details, see Pub. TIP member that a part of your monthly social security
519. or equivalent tier 1 railroad retirement benefits
may be taxable. See Pub. 915. You can choose to have in-
Periodic payments. Unless you choose no withholding, come tax withheld from those benefits. Use Form W-4V to
your annuity or similar periodic payments (other than eligi- make this choice.
ble rollover distributions) will be treated as wages for with-
holding purposes. Periodic payments are amounts paid at
regular intervals (such as weekly, monthly, or yearly) for a
period of time greater than 1 year (such as for 15 years or Cost (Investment in the
for life). You should give the payer a completed withhold-
ing certificate (Form W-4P or a similar form provided by Contract)
the payer). If you don't, tax will be withheld as if you were
single with no adjustments made in Steps 2 through 4 on Distributions from your pension or annuity plan may in-
Form W-4P. clude amounts treated as a recovery of your cost (invest-
Tax will be withheld as if you were single with no adjust- ment in the contract). If any part of a distribution is treated
ments made in Steps 2 through 4 on Form W-4P if: as a recovery of your cost under the rules explained in this
publication, that part is tax free. Therefore, the first step in
• You don't give the payer your SSN (in the required
figuring how much of a distribution is taxable is to deter-
manner), or
mine the cost of your pension or annuity.
• The IRS notifies the payer (before any payment is
In general, your cost is your net investment in the con-
made) that you gave an incorrect SSN.
tract as of the annuity starting date (or the date of the dis-
You must file a new withholding certificate to change tribution if earlier). To find this amount, you must first figure
the amount of withholding. See the instructions for Form the total premiums, contributions, or other amounts you
W-P and Periodic Payments in Pub. 505 for more informa- paid. This includes the amounts your employer contrib-
tion. uted that were taxable to you when paid. However, see
Foreign employment contributions, later. It doesn't include
Nonperiodic distributions. Unless you choose no with- amounts withheld from your pay on a tax-deferred basis
holding, the withholding rate for a nonperiodic distribution (money that was taken out of your gross pay before taxes
(a payment other than a periodic payment) that isn't an eli- were deducted). It also doesn't include amounts you con-
gible rollover distribution is 10% of the distribution. You tributed for health and accident benefits (including any ad-
can also ask the payer to withhold an additional amount ditional premiums paid for double indemnity or disability
using Form W-4R. The part of any loan treated as a distri- benefits).
bution (except an offset amount to repay the loan), ex-
plained later, is subject to withholding under this rule. From this total cost you must subtract the following
amounts.
Eligible rollover distribution. If you receive an eligible
rollover distribution, 20% of it will generally be withheld for 1. Any refunded premiums, rebates, dividends, or unre-
income tax. You can't choose not to have tax withheld paid loans that weren't included in your income and
from an eligible rollover distribution. However, tax won't be that you received by the later of the annuity starting
withheld if you have the plan administrator pay the eligible date or the date on which you received your first pay-
rollover distribution directly to another qualified plan or an ment.
IRA in a direct rollover. For more information about eligible 2. Any other tax-free amounts you received under the
rollover distributions, see Rollovers, later. contract or plan by the later of the dates in (1).

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3. If you must use the Simplified Method for your annuity church or a lay person) but only if the contributions
payments, the tax-free part of any single-sum pay- would be excludable from your gross income had they
ment received in connection with the start of the annu- been paid directly to you.
ity payments, regardless of when you received it. (See
Foreign employment contributions while a nonres-
Simplified Method, later, for information on its required
ident alien. In determining your cost, special rules apply
use.)
if you are a U.S. citizen or resident alien who received dis-
4. If you use the General Rule for your annuity payments, tributions in 2023 from a plan to which contributions were
the value of the refund feature in your annuity con- made while you were a nonresident alien. Your contribu-
tract. (See General Rule, later, for information on its tions and your employer's contributions aren't included in
use.) Your annuity contract has a refund feature if the your cost if the contribution:
annuity payments are for your life (or the lives of you
• Was made based on compensation which was for
and your survivor) and payments in the nature of a re-
services performed outside the United States while
fund of the annuity's cost will be made to your benefi-
you were a nonresident alien; and
ciary or estate if all annuitants die before a stated
amount or a stated number of payments are made. • Wasn't subject to income tax under the laws of the
For more information, see Pub. 939. United States or any foreign country, but only if the
contribution would have been subject to income tax if
The tax treatment of the items described in (1) through (3) paid as cash compensation when the services were
is discussed later under Taxation of Nonperiodic Pay- performed.
ments.
Form 1099-R. If you began receiving periodic
TIP payments of a life annuity in 2023, the payer Taxation of Periodic Payments
should show your total contributions to the plan in
box 9b of your 2023 Form 1099-R. This section explains how the periodic payments you re-
ceive from a pension or annuity plan are taxed. Periodic
Annuity starting date defined. Your annuity starting payments are amounts paid at regular intervals (such as
date is the later of the first day of the first period for which weekly, monthly, or yearly) for a period of time greater than
you received a payment or the date the plan's obligations 1 year (such as for 15 years or for life). These payments
became fixed. are also known as amounts received as an annuity. If you
receive an amount from your plan that isn't a periodic pay-
Example. On January 1, you completed all your pay- ment, see Taxation of Nonperiodic Payments, later.
ments required under an annuity contract providing for
monthly payments starting on August 1 for the period be- In general, you can recover the cost of your pension or
ginning July 1. The annuity starting date is July 1. This is annuity tax free over the period you are to receive the pay-
the date you use in figuring the cost of the contract and ments. The amount of each payment that is more than the
selecting the appropriate number from Table 1 for line 3 of part that represents your cost is taxable. However, see In-
the Simplified Method Worksheet. surance Premiums for Retired Public Safety Officers, ear-
lier.
Designated Roth accounts. Your cost in these accounts
is your designated Roth contributions that were included Designated Roth accounts. If you receive a qualified
in your income as wages subject to applicable withholding distribution from a designated Roth account, the distribu-
requirements. Your cost will also include any in-plan Roth tion isn't included in your gross income. This applies to
rollovers, designated Roth nonelective contributions, or both your cost in the account and income earned on that
designated Roth matching contributions you included in account. A qualified distribution is generally a distribu-
income. tion that is:
Foreign employment contributions. If you worked • Made after a 5-tax-year period of participation; and
abroad, your cost may include contributions by your em- • Made on or after the date you reach age 59 / , made 1 2
ployer to the retirement plan, but only if those contribu- to a beneficiary or your estate on or after your death,
tions would be excludable from your gross income had or attributable to your being disabled.
they been paid directly to you as compensation. The con- If the distribution isn't a qualified distribution, the rules
tributions that apply are: discussed in this section apply. The designated Roth ac-
1. Contributions before 1963 by your employer, count is treated as a separate contract.
2. Contributions after 1962 by your employer if the con- Period of participation. The 5-tax-year period of par-
tributions would be excludable from your gross in- ticipation is the 5-tax-year period beginning with the first
come (not including the foreign earned income exclu- tax year for which a contribution was made to the partici-
sion) had they been paid directly to you, or pant's designated Roth account in the plan. Therefore, if a
contribution is first made to a participant's designated
3. Contributions after 1996 by your employer if you per- Roth account in the plan for 2023, the first year for which a
formed the services of a foreign missionary (a duly or- qualified distribution can be made is 2028.
dained, commissioned, or licensed minister of a

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However, if a direct rollover is made to the plan from a or a tax-sheltered annuity plan or contract). You can't
designated Roth account under another plan, the use this method if your annuity is paid under a non-
5-tax-year period for the recipient plan begins with the first qualified plan.
tax year for which a contribution was made to the partici-
• General Rule. You must use this method if your annu-
pant's designated Roth account in the other plan (if ear-
ity is paid under a nonqualified plan. Generally, you
lier).
can't use this method if your annuity is paid under a
Your 401(k), 403(b), or 457(b) plan may permit you to
qualified plan. However, see Qualified plan annuity
roll over amounts from those plans to a designated Roth
starting before November 19, 1996, later, for excep-
account within the same plan. This is known as an in-plan
tions to this rule.
Roth rollover. If an in-plan Roth rollover is the first contribu-
tion made to your designated Roth account, the 5-tax-year You determine which method to use when you first begin
period of participation begins on the first day of the first receiving your annuity, and you continue using it each year
tax year in which you make the in-plan Roth rollover. that you recover part of your cost.
For more details, see In-plan Roth rollovers, later. If you had more than one partly taxable pension or an-
nuity, figure the tax-free part and the taxable part of each
Fully Taxable Payments separately.

The pension or annuity payments that you receive are fully Qualified plan annuity starting before November 19,
taxable if you have no cost in the contract because any of 1996. If your annuity is paid under a qualified plan and
the following situations apply to you. However, see Insur- your annuity starting date (defined earlier under Cost (In-
ance Premiums for Retired Public Safety Officers, earlier. vestment in the Contract)) is after July 1, 1986, and before
• You didn't pay anything or aren't considered to have November 19, 1996, you could have chosen to use either
paid anything for your pension or annuity. Amounts the Simplified Method or the General Rule. If your annuity
withheld from your pay on a tax-deferred basis aren't starting date is before July 2, 1986, you use the General
considered part of the cost of the pension or annuity Rule unless your annuity qualified for the 3-year Rule. If
payment. you used the 3-year Rule (which was repealed for annui-
ties starting after July 1, 1986), your annuity payments are
• Your employer didn't withhold contributions from your generally now fully taxable.
salary.
• You got back all of your contributions tax free in prior Exclusion limit. Your annuity starting date determines
years. However, see Exclusion not limited to cost un- the total amount of annuity payments that you can exclude
der Partly Taxable Payments, later. from income over the years. Once your annuity starting
date is determined, it doesn't change. If you calculate the
Report the total amount you received on Form 1040, taxable portion of your annuity payments using the Simpli-
1040-SR, or 1040-NR, line 5b. You should make no entry fied Method Worksheet, the annuity starting date deter-
on Form 1040, 1040-SR, or 1040-NR, line 5a. mines the recovery period for your cost. That recovery pe-
riod begins on your annuity starting date and isn't affected
Deductible voluntary employee contributions. Distri- by the date you first complete the worksheet.
butions you receive that are based on your accumulated
deductible voluntary employee contributions are generally Exclusion limited to cost. If your annuity starting
fully taxable in the year distributed to you. Accumulated date is after 1986, the total amount of annuity income that
deductible voluntary employee contributions include net you can exclude over the years as a recovery of the cost
earnings on the contributions. If distributed as part of a can't exceed your total cost. Any unrecovered cost at your
lump sum, they don't qualify for the 10-year tax option or (or the last annuitant's) death is allowed as an itemized
capital gain treatment, explained later. deduction on the final return of the decedent.

Example 1. Your annuity starting date is after 1986,
Partly Taxable Payments and you exclude $100 a month ($1,200 a year) under the
Simplified Method. The total cost of your annuity is
If you have a cost to recover from your pension or annuity
$12,000. Your exclusion ends when you have recovered
plan (see Cost (Investment in the Contract), earlier), you
your cost tax free, that is, after 10 years (120 months). Af-
can exclude part of each annuity payment from income as
ter that, your annuity payments are generally fully taxable.
a recovery of your cost. This tax-free part of the payment
is figured when your annuity starts and remains the same Example 2. The facts are the same as in Example 1,
each year even if the amount of the payment changes. except you die (with no surviving annuitant) after the
The rest of each payment is taxable. However, see Insur- eighth year of retirement. You have recovered tax free only
ance Premiums for Retired Public Safety Officers, earlier. $9,600 (8 × $1,200) of your cost. An itemized deduction
You figure the tax-free part of the payment using one of for your unrecovered cost of $2,400 ($12,000 – $9,600)
the following methods. can be taken on your final return.
• Simplified Method. You must generally use this Exclusion not limited to cost. If your annuity starting
method if your annuity is paid under a qualified plan (a date is before 1987, you can continue to take your monthly
qualified employee plan a qualified employee annuity, , exclusion for as long as you receive your annuity. If you

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chose a joint and survivor annuity, your survivor can con- How to use the Simplified Method. Complete Work-
tinue to take the survivor's exclusion figured as of the an- sheet A near the end of this publication to figure your taxa-
nuity starting date. The total exclusion may be more than ble annuity for 2023. Be sure to keep the completed work-
your cost. sheet; it will help you figure your taxable annuity next year.
To complete line 3 of the worksheet, you must deter-
Simplified Method mine the total number of expected monthly payments for
your annuity. How you do this depends on whether the an-
Under the Simplified Method, you figure the tax-free part nuity is for a single life, multiple lives, or a fixed period. For
of each annuity payment by dividing your cost by the total this purpose, treat an annuity that is payable over the life
number of anticipated monthly payments. For an annuity of an annuitant as payable for that annuitant's life even if
that is payable for the lives of the annuitants, this number the annuity has a fixed-period feature or also provides a
is based on the annuitants' ages on the annuity starting temporary annuity payable to the annuitant's child under
date and is determined from a table. For any other annuity, age 25.
this number is the number of monthly annuity payments
You don't need to complete line 3 of the work-
under the contract.
TIP sheet or make the computation on line 4 if you re-
Who must use the Simplified Method. You must use ceived annuity payments last year and used last
the Simplified Method if your annuity starting date is after year's worksheet to figure your taxable annuity. Instead,
November 18, 1996, and you meet both of the following enter the amount from line 4 of last year's worksheet on
conditions. line 4 of this year's worksheet.

1. You receive your pension or annuity payments from Single-life annuity. If your annuity is payable for your
any of the following plans. life alone, use Table 1 at the bottom of the worksheet to
a. A qualified employee plan. determine the total number of expected monthly pay-
ments. Enter on line 3 the number shown for your age on
b. A qualified employee annuity. your annuity starting date. This number will differ depend-
ing on whether your annuity starting date is before Novem-
c. A tax-sheltered annuity plan (403(b) plan).
ber 19, 1996, or after November 18, 1996.
2. On your annuity starting date, at least one of the fol-
Multiple-lives annuity. If your annuity is payable for
lowing conditions applies to you.
the lives of more than one annuitant, use Table 2 at the
a. You are under age 75. bottom of the worksheet to determine the total number of
expected monthly payments. Enter on line 3 the number
b. You are entitled to less than 5 years of guaranteed
shown for the annuitants' combined ages on the annuity
payments.
starting date. For an annuity payable to you as the primary
Guaranteed payments. Your annuity contract pro- annuitant and to more than one survivor annuitant, com-
vides guaranteed payments if a minimum number of pay- bine your age and the age of the youngest survivor annui-
ments or a minimum amount (for example, the amount of tant. For an annuity that has no primary annuitant and is
your investment) is payable even if you and any survivor payable to you and others as survivor annuitants, combine
annuitant don't live to receive the minimum. If the mini- the ages of the oldest and youngest annuitants. Don't treat
mum amount is less than the total amount of the payments as a survivor annuitant anyone whose entitlement to pay-
you are to receive, barring death, during the first 5 years ments depends on an event other than the primary annui-
after payments begin (figured by ignoring any payment in- tant's death.
creases), you are entitled to less than 5 years of guaran- However, if your annuity starting date is before 1998,
teed payments. don't use Table 2 and don't combine the annuitants' ages.
Instead, you must use Table 1 at the bottom of the work-
Annuity starting before November 19, 1996. If your
sheet and enter on line 3 the number shown for the pri-
annuity starting date is after July 1, 1986, and before No-
mary annuitant's age on the annuity starting date. This
vember 19, 1996, and you chose to use the Simplified
number will differ depending on whether your annuity
Method, you must continue to use it each year that you re-
starting date is before November 19, 1996, or after No-
cover part of your cost. You could have chosen to use the
vember 18, 1996.
Simplified Method if your annuity is payable for your life (or
the lives of you and your survivor annuitant) and you met Fixed-period annuity. If your annuity doesn't depend
both of the conditions listed earlier under Who must use in whole or in part on anyone's life expectancy, the total
the Simplified Method. number of expected monthly payments to enter on line 3
of the worksheet is the number of monthly annuity pay-
Who can't use the Simplified Method. You can't use ments under the contract.
the Simplified Method if you receive your pension or annu-
ity from a nonqualified plan or otherwise don't meet the Line 6. The amount on line 6 should include all
conditions described in the preceding discussion. See amounts that could have been recovered in prior years. If
General Rule, later. you didn't recover an amount in a prior year, you may be
able to amend your returns for the affected years.

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Example. Bill Smith, age 65, began receiving retire- • Qualified plan if you are age 75 or older on your annu-
ment benefits in 2023 under a joint and survivor annuity. ity starting date and your annuity payments are guar-
Bill's annuity starting date is January 1, 2023. The benefits anteed for at least 5 years.
are to be paid for the joint lives of Bill and his spouse, age
Annuity starting before November 19, 1996. If your
65. Bill had contributed $31,000 to a qualified plan and
annuity starting date is after July 1, 1986, and before No-
had received no distributions before the annuity starting
vember 19, 1996, you had to use the General Rule for ei-
date. Bill is to receive a retirement benefit of $1,200 a
ther circumstance just described. You also had to use it for
month, and his spouse is to receive a monthly survivor
any fixed-period annuity. If you didn't have to use the Gen-
benefit of $600 upon Bill's death.
eral Rule, you could have chosen to use it. If your annuity
Bill must use the Simplified Method to figure his taxable
starting date is before July 2, 1986, you had to use the
annuity because his payments are from a qualified plan
General Rule unless you could use the 3-year Rule.
and he is under age 75. Because his annuity is payable
If you had to use the General Rule (or chose to use it),
over the lives of more than one annuitant, he uses his and
you must continue to use it each year that you recover
his spouse's combined ages and Table 2 at the bottom of
your cost.
Worksheet A in completing line 3 of the worksheet. His
completed worksheet is shown later. Who can't use the General Rule. You can't use the
Bill's tax-free monthly amount is $100 ($31,000 ÷ 310) General Rule if you receive your pension or annuity from a
as shown on line 4 of the worksheet. Upon Bill's death, if qualified plan and none of the circumstances described in
Bill hasn't recovered the full $31,000 investment, his the preceding discussions apply to you. See Simplified
spouse will also exclude $100 from her $600 monthly pay- Method, earlier.
ment. The full amount of any annuity payments received
after 310 payments are paid must be included in gross in- More information. For complete information on using the
come. General Rule, including the actuarial tables you need, see
If Bill and his spouse die before 310 payments are Pub. 939.
made, an itemized deduction will be allowed for the unrec-
overed cost on the final income tax return of the last to die.
Multiple annuitants. If you and one or more other annui- Taxation of Nonperiodic
tants receive payments at the same time, you exclude
from each annuity payment a pro rata share of the monthly Payments
tax-free amount. Figure your share by taking the following
This section of the publication explains how any nonperi-
steps.
odic distributions you receive under a pension or annuity
1. Complete your worksheet through line 4 to figure the plan are taxed. Nonperiodic distributions are also known
monthly tax-free amount. as amounts not received as an annuity. They include all
payments other than periodic payments and corrective
2. Divide the amount of your monthly payment by the to-
distributions.
tal amount of the monthly payments to all annuitants.
For example, the following items are treated as nonperi-
3. Multiply the amount on line 4 of your worksheet by the
odic distributions.
amount figured in (2) above. The result is your share
of the monthly tax-free amount. • Cash withdrawals.
Replace the amount on line 4 of the worksheet with the • Distributions of current earnings (dividends) on your
result in (3) above. Enter that amount on line 4 of your investment. However, don't include these distributions
worksheet each year. in your income to the extent the insurer keeps them to
pay premiums or other consideration for the contract.
General Rule • Certain loans. See Loans Treated as Distributions,
later.
Under the General Rule, you determine the tax-free part of
• The value of annuity contracts transferred without full
each annuity payment based on the ratio of the cost of the
and adequate consideration. See Transfers of Annuity
contract to the total expected return. Expected return is
Contracts, later.
the total amount you and other eligible annuitants can ex-
pect to receive under the contract. To figure it, you must Corrective distributions of excess plan contributions.
use life expectancy (actuarial) tables prescribed by the Generally, if the contributions made for you during the year
IRS. to certain retirement plans exceed certain limits, the ex-
cess is taxable to you. To correct an excess, your plan
Who must use the General Rule. You must use the
may distribute it to you (along with any income earned on
General Rule if you receive pension or annuity payments
the excess). Although the plan reports the corrective distri-
from a:
butions on Form 1099-R, the distribution isn't treated as a
• Nonqualified plan (such as a private annuity, a pur- nonperiodic distribution from the plan. It isn't subject to the
chased commercial annuity, or a nonqualified em- allocation rules explained in the following discussion, it
ployee plan), or

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Worksheet A. Simplified Method Worksheet for Bill Smith
                                                                                       Keep for Your Records

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.  $ 14,400
2. Enter your cost in the plan (contract) at the annuity starting date plus any death benefit 
    exclusion.* See Cost (Investment in the Contract), 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.  1,200
6. Enter any amount 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.  1,200
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, 1040-SR, or 1040-NR, line 5b. Note: If your 
    Form 1099-R shows a larger taxable amount, use the amount figured on this line instead. If you 
    are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers 
    before entering an amount on your tax return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              9.  $ 13,200
10. Was your annuity starting date before 1987?
     Yes. STOP. Don't complete the rest of this worksheet.
     No. Add lines 6 and 8. This is the amount you have recovered tax free through 2023. You will 
    need this number if you need to fill out this worksheet next year . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                         10. 1,200
11. Balance of cost to be recovered. Subtract line 10 from line 2. If zero, you won't have to 
    complete this worksheet next year. The payments you receive next year will generally be fully 
    taxable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11. $ 29,800

* A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996.

                                               Table 1 for Line 3 Above
                                                     AND your annuity starting date was—
                    IF the age at annuity    BEFORE November 19,        AFTER November 18,
                    starting date was...       1996, enter on line 3... 1996, enter on line 3...
                    55 or under                      300                            360
                    56–60                            260                            310
                    61–65                            240                            260
                    66–70                            170                            210
                    71 or older                      120                            160

                                               Table 2 for Line 3 Above
                    IF the combined ages at                                     THEN enter
                    annuity starting date were...                               on line 3...
                    110 or under                                                    410
                    111–120                                                         360
                    121–130                                                         310
                    131–140                                                         260
                    141 or older                                                    210

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can't be rolled over into another plan, and it isn't subject to • Because the participant, if an employee, separates
the additional tax on early distributions. from service; or
If your retirement plan made a corrective distribu- • After the participant, if a self-employed individual, be-
TIP tion of excess amounts (excess deferrals, excess comes totally and permanently disabled.
contributions, or excess annual additions), your
If you choose to include NUA in your income for
Form 1099-R should have the code “8,” “B,” “P,” or “E” in
TIP the year of the distribution and the participant was
box 7.
born before January 2, 1936, you may be able to
For information on plan contribution limits and how to figure the tax on the NUA using the optional methods de-
report corrective distributions of excess contributions, see scribed under Lump-Sum Distributions, later.
Retirement Plan Contributions under Employee Compen-
If the distribution isn't a lump-sum distribution, tax is de-
sation in Pub. 525.
ferred only on the NUA resulting from employee contribu-
tions other than deductible voluntary employee contribu-
Figuring the Taxable Amount tions.
The NUA on which tax is deferred should be shown in
How you figure the taxable amount of a nonperiodic distri- box 6 of the Form 1099-R you receive from the payer of
bution depends on whether it is made before the annuity the distribution.
starting date, or on or after the annuity starting date. If it is When you sell or exchange employer securities with
made before the annuity starting date, its tax treatment tax-deferred NUA, any gain is long-term capital gain up to
also depends on whether it is made under a qualified or the amount of the NUA that isn’t included in your basis in
nonqualified plan. If it is made under a nonqualified plan, the employer securities. Any gain that is more than the
its tax treatment depends on whether it fully discharges NUA is long-term or short-term gain, depending on how
the contract, is received under certain life insurance or en- long you held the securities after the distribution.
dowment contracts, or is allocable to an investment you Your basis in the employer securities is the total of the
made before August 14, 1982. following amounts.
You may be able to roll over the taxable amount of • Your contributions to the plan that are attributable to
TIP a nonperiodic distribution from a qualified retire- the securities.
ment plan into another qualified retirement plan or
a traditional IRA tax free. See Rollovers, later. If you don't • Your employer's contributions that were taxed as ordi-
make a tax-free rollover and the distribution qualifies as a nary income in the year the securities were distrib-
lump-sum distribution, you may be able to elect an op- uted.
tional method of figuring the tax on the taxable amount. • Your NUA in the securities that is attributable to em-
See Lump-Sum Distributions, later. ployer contributions and taxed as ordinary income in
the year the securities were distributed.
Annuity starting date. The annuity starting date is either
the first day of the first period for which you receive an an- How to report. Enter the total amount of a nonperiodic
nuity payment under the contract or the date on which the distribution on Form 1040, 1040-SR, or 1040-NR, line 5a.
obligation under the contract becomes fixed, whichever is Enter the taxable amount of the distribution on Form 1040,
later. 1040-SR, or 1040-NR, line 5b. However, if you make a
tax-free rollover or elect an optional method of figuring the
Distributions of employer securities. If you receive a tax on a lump-sum distribution, see How to report in the
distribution of employer securities from a qualified retire- discussions of those tax treatments, later.
ment plan, you may be able to defer the tax on the net un-
realized appreciation (NUA) in the securities. The NUA is Distribution On or After Annuity Starting
the net increase in the securities' value while they were in Date
the trust. This tax deferral applies to distributions of the
employer corporation's stocks, bonds, registered deben- If you receive a nonperiodic payment from your annuity
tures, and debentures with interest coupons attached. contract on or after the annuity starting date, you must
If the distribution is a lump-sum distribution, tax is de- generally include all of the payment in gross income. For
ferred on all of the NUA unless you choose to include it in example, a cost-of-living increase in your pension after the
your income for the year of the distribution. annuity starting date is an amount not received as an an-
A lump-sum distribution for this purpose is the distribu- nuity and, as such, is fully taxable.
tion or payment of a plan participant's entire balance
(within a single tax year) from all of the employer's quali- Reduction in subsequent payments. If the annuity pay-
fied plans of one kind (pension, profit-sharing, or stock bo- ments you receive are reduced because you received a
nus plans), but only if paid: nonperiodic distribution, you can exclude part of the non-
• Because of the plan participant's death; periodic distribution from gross income. The part you can
exclude is equal to your cost in the contract reduced by
• After the participant reaches age 59 / ;1 2 any tax-free amounts you previously received under the
contract, multiplied by a fraction. The numerator is the re-
duction in each annuity payment because of the

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nonperiodic distribution. The denominator is the full unre-
duced amount of each annuity payment originally provi-
ded for. $10,000
$50,000 x = $5,000
Single-sum in connection with the start of annuity $100,000
payments. If you receive a single-sum payment on or af-
ter your annuity starting date in connection with the start of Defined contribution plan. A defined contribution plan
annuity payments for which you must use the Simplified is a plan in which you have an individual account. Your
Method, treat the single-sum payment as if it were re- benefits are based only on the amount contributed to the
ceived before your annuity starting date. (See Simplified account and the income, gains or losses, etc., which may
Method under Taxation of Periodic Payments, earlier, for be allocated to that account. Under a defined contribution
information on its required use.) Follow the rules dis- plan, your contributions (and income allocable to those
cussed under Distribution Before Annuity Starting Date contributions) may be treated as a separate contract for
From a Qualified Plan, later. figuring the taxable part of any distribution. The employer
contributions (and income allocable to those contribu-
Distribution in full discharge of contract. You may re- tions) wouldn't be considered part of that separate con-
ceive an amount on or after the annuity starting date that tract.
fully satisfies the payer's obligation under the contract.
The amount may be a refund of what you paid for the con- Example. Ryan participates in a defined contribution
tract or for the complete surrender, redemption, or matur- plan that treats employee contributions and earnings allo-
ity of the contract. Include the amount in gross income cable to them as a separate contract. He received a
only to the extent that it exceeds the remaining cost of the non-annuity distribution of $5,000 before his annuity start-
contract. ing date. He had made after-tax contributions of $10,000.
The earnings allocable to his contributions were $2,500.
His employer also contributed $10,000. The earnings allo-
Distribution Before Annuity Starting Date
cable to the employer contributions were $2,500.
From a Qualified Plan To determine the tax-free amount of Ryan's distribution,
use the same formula shown earlier. However, because
If you receive a nonperiodic distribution before the annuity
employee contributions are treated as a separate contract,
starting date from a qualified retirement plan, you can gen-
the account balance would be the total of Ryan's contribu-
erally allocate only part of it to the cost of the contract. You
tions and allocable earnings.
exclude from your gross income the part that you allocate
Thus, the tax-free amount would be $5,000 × ($10,000
to the cost. You include the remainder in your gross in-
÷ $12,500) = $4,000. The taxable amount would be
come.
$1,000 ($5,000 − $4,000).
For this purpose, a qualified retirement plan is a: If the employee contributions weren't treated as a sepa-
rate contract, the tax-free amount would be $2,000
• Qualified employee plan (or annuity contract pur- ($5,000 × ($10,000 ÷ $25,000)) and the taxable amount
chased by such a plan), would be $3,000 ($5,000 − $2,000).
• Qualified employee annuity plan, or
Plans that permitted withdrawal of employee contri-
• Tax-sheltered annuity plan (403(b) plan). butions. If you contributed before 1987 to a pension plan
that, as of May 5, 1986, permitted you to withdraw your
Use the following formula to figure the tax-free amount
contributions before your separation from service, any dis-
of the distribution.
tribution before your annuity starting date is tax free to the
extent that it, when added to earlier distributions received
after 1986, doesn't exceed your cost as of December 31,
Amount Cost of contract Tax-free 1986. Apply the allocation described in the preceding dis-
x =
received Account balance amount cussion only to any excess distribution.

For this purpose, your account balance includes only Distribution Before Annuity Starting Date
amounts to which you have a nonforfeitable right (a right From a Nonqualified Plan
that can't be taken away).
If you receive a nonperiodic distribution before the annuity
Example. Ann Brown received a $50,000 distribution starting date from a plan other than a qualified retirement
from her retirement plan before her annuity starting date. plan (nonqualified plan), it is allocated first to earnings (the
She had $10,000 invested (cost) in the plan. Her account taxable part) and then to the cost of the contract (the
balance was $100,000. She can exclude $5,000 of the tax-free part). This allocation rule applies, for example, to
$50,000 distribution, figured as follows. a commercial annuity contract you bought directly from
the issuer. You include in your gross income the smaller
of:
• The nonperiodic distribution, or

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• The amount by which the cash value of the contract Form 1099-INT will show the total interest accrued, includ-
(figured without considering any surrender charge) im- ing the part you reported when the bonds were distributed
mediately before you receive the distribution exceeds to you. For information on how to adjust your interest in-
your investment in the contract at that time. come for U.S. savings bond interest you previously repor-
ted, see How To Report Interest Income in chapter 1 of
Example. You bought an annuity from an insurance Pub. 550, Investment Income and Expenses.
company. Before the annuity starting date under your an-
nuity contract, you received a $7,000 distribution. At the
time of the distribution, the annuity had a cash value of Loans Treated as Distributions

$16,000 and your investment in the contract was $10,000. If you borrow money from your retirement plan, you must
The distribution is allocated first to earnings, so you must treat the loan as a nonperiodic distribution from the plan
include $6,000 ($16,000 − $10,000) in your gross income. unless it qualifies for the exception to this loan-as-distribu-
The remaining $1,000 ($7,000 − $6,000) is a tax-free re- tion rule explained later. This treatment also applies to any
turn of part of your investment. loan under a contract purchased under your retirement
plan, and to the value of any part of your interest in the
Exception to allocation rule. Certain nonperiodic distri-
plan or contract that you pledge or assign (or agree to
butions received before the annuity starting date aren't
pledge or assign). It applies to loans from both qualified
subject to the allocation rule in the preceding discussion.
and nonqualified plans, including commercial annuity con-
Instead, you include the amount of the payment in gross
tracts you purchase directly from the issuer. Further, it ap-
income only to the extent that it exceeds the cost of the
plies if you renegotiate, extend, renew, or revise a loan
contract.
This exception applies to the following distributions. that qualified for the exception below if the altered loan
doesn't qualify. In that situation, you must treat the out-
• Distributions in full discharge of a contract that you re- standing balance of the loan as a distribution on the date
ceive as a refund of what you paid for the contract or of the transaction.
for the complete surrender, redemption, or maturity of
the contract. You determine how much of the loan is taxable using
the allocation rules for nonperiodic distributions discussed
• Distributions from life insurance or endowment con- under Figuring the Taxable Amount, earlier. The taxable
tracts (other than modified endowment contracts, as part may be subject to the additional tax on early distribu-
defined in section 7702A of the Internal Revenue tions. It isn't an eligible rollover distribution and doesn't
Code) that aren't received as an annuity under the qualify for the 10-year tax option.
contracts.
Exception for qualified plan, 403(b) plan, and govern-
• Distributions under contracts entered into before Au-
mental plan loans. At least part of certain loans under a
gust 14, 1982, to the extent that they are allocable to
qualified employee plan, qualified employee annuity,
your investment before August 14, 1982.
tax-sheltered annuity (403(b) plan), or governmental plan
If you bought an annuity contract before August 14, isn't treated as a distribution from the plan. This exception
1982, and made investments both before and after August to the loan-as-distribution rule applies only to a loan that
14, 1982, the distributed amounts are allocated to your in- either:
vestment or to earnings in the following order.
• Is used to acquire your main home, or
1. The part of your investment that was made before Au-
gust 14, 1982. This part of the distribution is tax free. • Must be repaid within 5 years.
If a loan qualifies for this exception, you must treat it as
2. The earnings on the part of your investment that was a nonperiodic distribution only to the extent that the loan,
made before August 14, 1982. This part of the distri- when added to the outstanding balances of all your loans
bution is taxable. from all plans of your employer (and certain related em-
3. The earnings on the part of your investment that was ployers, defined later), exceeds the lesser of:
made after August 13, 1982. This part of the distribu- • $50,000; or
tion is taxable.
• Half the present value (but not less than $10,000) of
4. The part of your investment that was made after Au- your nonforfeitable accrued benefit under the plan, de-
gust 13, 1982. This part of the distribution is tax free. termined without regard to any accumulated deducti-
The taxable portion of distributions from nonquali- ble employee contributions.
! fied plans is subject to the NIIT. See the Instruc- You must reduce the $50,000 amount if you already
CAUTION tions for Form 8960. had an outstanding loan from the plan during the 1-year
period ending the day before you took out the loan. The
Distribution of U.S. savings bonds. If you receive U.S. amount of the reduction is your highest outstanding loan
savings bonds in a taxable distribution from a retirement balance during that period minus the outstanding balance
or profit-sharing plan, report the value of the bonds at the on the date you took out the new loan. If this amount is
time of distribution as income. The value of the bonds in- zero or less, ignore it.
cludes accrued interest. When you cash the bonds, your

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Substantially level payments. To qualify for the ex- An affiliated service group is generally two or more
ception to the loan-as-distribution rule, the loan must re- service organizations whose relationship involves an own-
quire substantially level payments at least quarterly over ership connection. Their relationship also includes the
the life of the loan. If the loan is from a designated Roth regular or significant performance of services by one or-
account, the payments must be satisfied separately for ganization for or in association with another.
that part of the loan and for the part of the loan from other
Denial of interest deduction. If the loan from a quali-
accounts under the plan. This level payment requirement
fied plan isn't treated as a distribution because the excep-
doesn't apply to the period in which you are on a leave of
tion applies, you can't deduct any of the interest on the
absence without pay or with a rate of pay that is less than
loan during any period that:
the required installment. Generally, this leave of absence
must not be longer than 1 year. You must repay the loan • The loan is secured by amounts from elective defer-
within 5 years from the date of the loan (unless the loan rals under a qualified cash or deferred arrangement
was used to acquire your main home). Your installment (section 401(k) plan) or a salary reduction agreement
payments after the leave ends must not be less than your to purchase a tax-sheltered annuity, or
original payments. You are a key employee as defined in section 416(i) of
•
However, if your plan suspends your loan payments for the Internal Revenue Code.
any part of the period during which you are in the uni-
formed services, you won't be treated as having received Reporting by plan. If your loan is treated as a distribu-
a distribution even if the suspension is for more than 1 tion (deemed distribution), you should receive a Form
year and the term of the loan is extended. The loan pay- 1099-R showing code “L” in box 7. If your loan is treated
ments must resume upon completion of such period and as a qualified plan loan offset, you should receive a Form
the loan must be repaid in substantially level installments 1099-R showing code “M” in box 7. If your loan is not a
within 5 years from the date of the loan (unless the loan qualified plan loan offset, no code will be reported on
was used to acquire your main home) plus the period of Form 1099-R for the offset.
suspension.
Effect on investment in the contract. If your loan is
Example 1. On May 1, 2023, you borrowed $40,000 treated as a distribution, you must reduce your investment
from your retirement plan. The loan was to be repaid in in the contract to the extent that the distribution is tax free
level monthly installments over 5 years. The loan wasn't under the allocation rules for qualified plans, explained
used to acquire your main home. You make nine monthly earlier. Repayments of the loan increase your investment
payments and start an unpaid leave of absence that lasts in the contract to the extent that the distribution is taxable
for 12 months. You weren't in the uniformed services dur- under those rules.
ing this period. After the leave period ends and you re- If you receive a loan under a nonqualified plan other
sume active employment, you resume making repayments than a 403(b) plan, including a commercial annuity con-
on the loan. You must repay this loan by April 30, 2028 (5 tract that you purchase directly from the issuer, you in-
years from the date of this loan). You can increase your crease your investment in the contract to the extent that
monthly installments or you can make the original monthly the distribution is taxable under the general allocation rule
installments and on April 30, 2028, pay the balance. for nonqualified plans, explained earlier. Repayments of
the loan don't affect your investment in the contract. How-
Example 2. The facts are the same as in Example 1, ever, if the distribution is excepted from the general alloca-
except that you are on a leave of absence performing tion rule (for example, because it is made under a contract
service in the uniformed services for 2 years. The loan entered into before August 14, 1982), you reduce your in-
payments were suspended for that period. You must re- vestment in the contract to the extent that the distribution
sume making loan payments at the end of that period and is tax free and increase it for loan repayments to the extent
the loan must be repaid by April 30, 2030 (5 years from that the distribution is taxable.
the date of the loan plus the period of suspension, which
is 2 years in this example).
Transfers of Annuity Contracts
Related employers and related plans. In determin-
ing loan balances for purposes of applying the exception If you transfer without full and adequate consideration an
to the loan-as-distribution rule, you must add the balances annuity contract issued after April 22, 1987, you are trea-
of all your loans from all plans of your employer and from ted as receiving a nonperiodic distribution. The distribu-
all plans of your employers who are treated as a single tion equals the excess of:
employer. Treat separate employers' plans as plans of a
single employer if they are treated that way under other • The cash surrender value of the contract at the time of
qualified retirement plan rules because the employers are transfer, over
related. • Your investment in the contract at that time.
Employers are related if they are:
This rule doesn't apply to transfers between spouses or
• Members of a controlled group of corporations, transfers between former spouses incident to a divorce.

• Businesses under common control, or Tax-free exchange. No gain or loss is recognized on an
• Members of an affiliated service group. exchange of an annuity contract for another annuity

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contract if the insured or annuitant remains the same. • The amount of cash reinvested in the new contract.
However, if an annuity contract is exchanged for a life in-
• Your investment in the old contract on the date of the
surance or endowment contract, any gain due to interest
initial distribution.
accumulated on the contract is ordinary income.
You must also attach the following items to your timely
If you transfer a full or partial interest in a tax-sheltered
filed income tax return for the year of the initial distribution.
annuity that isn't subject to restrictions on early distribu-
tions to another tax-sheltered annuity, the transfer quali- • A copy of the statement you gave to the new issuer.
fies for nonrecognition of gain or loss. • A statement that contains the words “ELECTION UN-
If you exchange an annuity contract issued by a life in- DER REV. PROC. 92-44,” the new issuer's name, and
surance company that is subject to a rehabilitation, con- the policy number or similar identifying information for
servatorship, or similar state proceeding for an annuity the new contract.
contract issued by another life insurance company, the ex-
change qualifies for nonrecognition of gain or loss. The Tax-free exchange reported on Form 1099-R. If you
exchange is tax free even if the new contract is funded by make a tax-free exchange of an annuity contract for an-
two or more payments from the old annuity contract. This other annuity contract issued by a different company, the
also applies to an exchange of a life insurance contract for exchange will be shown on Form 1099-R with code “6” in
a life insurance, endowment, annuity, or qualified box 7. You need not report this on your tax return.
long-term care insurance contract.
Date of purchase of contract received in a tax-free
If you transfer part of the cash surrender value of an ex- exchange. If you acquire an annuity contract in a tax-free
isting annuity contract for a new annuity contract issued by exchange for another annuity contract, its date of pur-
another insurance company, the transfer qualifies for non- chase is the date you purchased the annuity you ex-
recognition of gain or loss. The funds must be transferred changed. This rule applies for determining if the annuity
directly between the insurance companies. Your invest- qualifies for exemption from the tax on early distributions
ment in the original contract immediately before the ex- as an immediate annuity. See Tax on Early Distributions,
change is allocated between the contracts based on the later.
percentage of the cash surrender value allocated to each
contract.
Lump-Sum Distributions
Example. You own an annuity contract issued by ABC This section on lump-sum distributions only ap-
Insurance. You assign 60% of the cash surrender value of TIP plies if the plan participant was born before Janu-
that contract to DEF Insurance to purchase an annuity ary 2, 1936. If the plan participant was born after
contract. The funds are transferred directly between the January 1, 1936, the taxable amount of this nonperiodic
insurance companies. You don't recognize any gain or payment is reported as discussed earlier.
loss on the transaction. After the exchange, your invest-
ment in the new contract is equal to 60% of your invest-
ment in the old contract immediately before the exchange. A lump-sum distribution is the distribution or payment in
Your investment in the old contract is equal to 40% of your 1 tax year of a plan participant's entire balance from all of
original investment in that contract. the employer's qualified plans of one kind (for example,
pension, profit-sharing, or stock bonus plans). Addition-
Tax-free transfers for certain cash distributions. If ally, a lump-sum distribution is a distribution that was paid:
you receive cash from the surrender of one contract and
invest the cash in another contract, you generally don't • Because of the plan participant's death;
have a tax-free transfer. However, you can elect to receive • After the participant reaches age 59 / ;1 2
tax-free treatment for a cash distribution from an insur- Because the participant, if an employee, separates
•
ance company that is subject to a rehabilitation, conserva- from service; or
torship, insolvency, or similar state proceeding if all of the
following conditions are met. • After the participant, if a self-employed individual, be-
comes totally and permanently disabled.
• You withdraw all the cash to which you are entitled.
A distribution from a nonqualified plan (such as a privately
• You reinvest the proceeds within 60 days in a single purchased commercial annuity or a section 457 deferred
contract issued by another insurance company. compensation plan of a state or local government or
• You assign all rights to any future distributions to the tax-exempt organization) can't qualify as a lump-sum dis-
new issuer if the cash distribution is restricted by the tribution.
state proceeding to an amount that is less than re-
The participant's entire balance from a plan doesn't in-
quired for full settlement.
clude certain forfeited amounts. It also doesn't include any
• An exchange of these contracts would otherwise qual- deductible voluntary employee contributions allowed by
ify as a tax-free transfer. the plan after 1981 and before 1987.
You must give the new issuer a statement containing If you receive a lump-sum distribution from a qualified
the following information. employee plan or qualified employee annuity and the plan
• The amount of cash distributed under the old contract. participant was born before January 2, 1936, you may be

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able to elect optional methods of figuring the tax on the • Any distribution if an earlier election to use either the
distribution. The part from active participation in the plan 5- or 10-year tax option had been made after 1986 for
before 1974 may qualify as capital gain subject to a 20% the same plan participant.
tax rate. The part from participation after 1973 (and any
• U.S. Retirement Plan Bonds distributed with a lump
part from participation before 1974 that you don't report as
sum.
capital gain) is ordinary income. You may be able to use
the 10-year tax option, discussed later, to figure tax on the • Any distribution made during the first 5 tax years that
ordinary income part. the participant was in the plan, unless it was made be-
cause the participant died.
Each individual, estate, or trust who receives part of a
lump-sum distribution on behalf of a plan participant who • The current actuarial value of any annuity contract in-
was born before January 2, 1936, can choose whether to cluded in the lump sum. (Box 8 of Form 1099-R
elect the optional methods for the part each received. should show this amount, which you use only to figure
However, if two or more trusts receive the distribution, the tax on the ordinary income part of the distribution.)
plan participant or the personal representative of a de- • Any distribution to a 5% owner that is subject to penal-
ceased participant must make the choice. ties under section 72(m)(5)(A) of the Internal Revenue
Use Form 4972 to figure the separate tax on a Code.
lump-sum distribution using the optional methods. The tax • A distribution from an IRA.
figured on Form 4972 is added to the regular tax figured
on your other income. This may result in a smaller tax than • A distribution from a tax-sheltered annuity (section
403(b) plan).
you would pay by including the taxable amount of the dis-
tribution as ordinary income in figuring your regular tax. • A distribution of the redemption proceeds of bonds
rolled over tax free to a qualified pension plan, etc.,
Alternate payee under qualified domestic relations from a qualified bond purchase plan.
order. If you receive a distribution as an alternate payee
under a qualified domestic relations order (discussed ear- • A distribution from a qualified plan if the participant or
lier under General Information), you may be able to their surviving spouse previously received an eligible
choose the optional tax computations for it. You can make rollover distribution from the same plan (or another
this choice for a distribution that would be treated as a plan of the employer that must be combined with that
lump-sum distribution had it been received by your spouse plan for the lump-sum distribution rules) and the previ-
or former spouse (the plan participant). However, for this ous distribution was rolled over tax free to another
purpose, the balance to your credit doesn't include any qualified plan or an IRA.
amount payable to the plan participant. • A distribution from a qualified plan that received a roll-
If you choose an optional tax computation for a distribu- over after 2001 from an IRA (other than a conduit
tion received as an alternate payee, this choice won't af- IRA), a governmental section 457(b) plan, or a section
fect any election for distributions from your own plan. 403(b) tax-sheltered annuity on behalf of the plan par-
ticipant.
More than one recipient. One or all of the recipients of a
lump-sum distribution can use the optional tax computa- • A distribution from a qualified plan that received a roll-
tions. See Multiple recipients of a lump-sum distribution in over after 2001 from another qualified plan on behalf
the instructions for Form 4972. of that plan participant's surviving spouse.
• A corrective distribution of excess deferrals, excess
Reemployment. A separated employee's vested per- contributions, excess aggregate contributions, or ex-
centage in their retirement benefit may increase if they are cess annual additions.
rehired by the employer within 5 years following separa-
tion from service. This possibility doesn't prevent a distri- • A lump-sum credit or payment from the CSRS (or the
bution made before reemployment from qualifying as a FERS).
lump-sum distribution. However, if the employee elected
an optional method of figuring the tax on the distribution How to treat the distribution. If you receive a lump-sum
and their vested percentage in the previous retirement distribution, you may have the following options for how to
benefit increases after reemployment, the employee must treat the taxable part.
recapture the tax saved. This is done by increasing the tax • Report the part of the distribution from participation
for the year in which the increase in vesting first occurs. before 1974 as a capital gain (if you qualify) and the
part from participation after 1973 as ordinary income.
Distributions that don't qualify. The following distribu-
tions don't qualify as lump-sum distributions for the capital • Report the part of the distribution from participation
gain treatment or 10-year tax option. before 1974 as a capital gain (if you qualify) and use
the 10-year tax option to figure the tax on the part from
• The part of a distribution not rolled over if the distribu- participation after 1973 (if you qualify).
tion is partially rolled over to another qualified plan or
an IRA. • Use the 10-year tax option to figure the tax on the total
taxable amount (if you qualify).

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• Roll over all or part of the distribution. See Rollovers, Cost. In general, your cost is the total of:
later. No tax is currently due on the part rolled over.
• The plan participant's nondeductible contributions to
Report any part not rolled over as ordinary income.
the plan,
• Report the entire taxable part of the distribution as or-
• The plan participant's taxable costs of any life insur-
dinary income on your tax return.
ance contract distributed,
The first three options are explained in the following
discussions. • Any employer contributions that were taxable to the
plan participant, and
Electing optional lump-sum treatment. You can • Repayments of any loans that were taxable to the plan
choose to use the 10-year tax option or capital gain treat- participant.
ment only once after 1986 for any plan participant. If you
You must reduce this cost by amounts previously distrib-
make this choice, you can't use either of these optional
uted tax free.
treatments for any future distributions for the participant.
Complete Form 4972 and attach it to your Form 1040 or Net unrealized appreciation (NUA). The NUA in em-
1040-SR if you choose to use one or both of the tax op- ployer securities (box 6 of Form 1099-R) received as part
tions. If you received more than one lump-sum distribution of a lump-sum distribution is generally tax free until you
for a plan participant during the year, you must add them sell or exchange the securities. (See Distributions of em-
together in your computation. If you and your spouse are ployer securities under Figuring the Taxable Amount, ear-
filing a joint return and you both have received a lump-sum lier.) However, if you choose to include the NUA in your in-
distribution, each of you should complete a separate Form come for the year of the distribution and there is an
4972. amount in box 3 of Form 1099-R, part of the NUA will qual-
ify for capital gain treatment. Use the NUA Worksheet in
Time for choosing. You must decide to use the tax
the Instructions for Form 4972 to find the part that quali-
options before the end of the time, including extensions,
fies.
for making a claim for credit or refund of tax. This is usu-
ally 3 years after the date the return was filed or 2 years Losses. You may be able to claim a loss on your return if
after the date the tax was paid, whichever is later. (Re- you receive a lump-sum distribution that is less than the
turns filed before their due dates are considered filed on plan participant's cost. You must receive the distribution
their due dates.) entirely in cash or worthless securities. The amount you
Changing your mind. You can change your mind and can claim is the difference between the participant's cost
decide not to use the tax options within the time period and the amount of the cash distribution, if any.
just discussed. If you change your mind, file Form 1040-X, However, for tax years 2018 through 2025, miscellane-
Amended U.S. Individual Income Tax Return, with a state- ous itemized deductions subject to the 2%-of-adjus-
ment saying you don't want to use the optional lump-sum ted-gross-income limit are suspended and therefore not
treatment. Generally, you must pay any additional tax due deductible on Schedule A (Form 1040).
to the change with the Form 1040-X. A loss under a nonqualified plan, such as a com-
How to report. If you elect capital gain treatment (but TIP mercial variable annuity, is deductible in the same
not the 10-year tax option) for a lump-sum distribution, in- manner as a lump-sum distribution.
clude the ordinary income part of the distribution on Form
1040, 1040-SR, or 1040-NR, lines 5a and 5b. Enter the Capital Gain Treatment
capital gain part of the distribution in Part II of Form 4972.
Include the tax from Form 4972, line 7, in the total on Form Capital gain treatment applies only to the taxable part of a
1040, 1040-SR, or 1040-NR, line 16. lump-sum distribution resulting from participation in the
If you elect the 10-year tax option, don't include any plan before 1974. The amount treated as capital gain is
part of the distribution on Form 1040, 1040-SR, or taxed at a 20% rate. You can elect this treatment only
1040-NR, lines 5a and 5b. Report the entire distribution in once for any plan participant, and only if the plan partici-
Part III of Form 4972 or, if you also elect capital gain treat- pant was born before January 2, 1936.
ment, report the capital gain part in Part II and the ordinary
income part in Part III. Include the tax from Form 4972, Complete Part II of Form 4972 to choose the 20% capi-
line 30, in the total on Form 1040, 1040-SR, or 1040-NR, tal gain election.
line 16.
Figuring the capital gain and ordinary income parts.
Taxable and tax-free parts of the distribution. The Generally, figure the capital gain and ordinary income
taxable part of a lump-sum distribution is the employer's parts of a lump-sum distribution by using the following for-
contributions and income earned on your account. You mulas.
may recover your cost in the lump sum and any NUA in
employer securities tax free.

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years. You can elect this treatment only once for any plan
participant, and only if the plan participant was born be-
Capital Gain: fore January 2, 1936.
Total Taxable Months of active participation before 1974
× The ordinary income part of the distribution is the
Amount Total months of active participation amount shown in box 2a of the Form 1099-R given to you
by the payer, minus the amount, if any, shown in box 3.
Ordinary Income:
You can also treat the capital gain part of the distribution
Total Taxable Months of active participation after 1973 (box 3 of Form 1099-R) as ordinary income for the 10-year
×
Amount Total months of active participation tax option if you don't choose capital gain treatment for
that part.
In figuring the months of active participation before
1974, count as 12 months any part of a calendar year in Complete Part III of Form 4972 to choose the 10-year
which the plan participant actively participated under the tax option. You must use the special Tax Rate Schedule
plan. For active participation after 1973, count as 1 month shown in the instructions for Part III to figure the tax.
any part of a calendar month in which the participant ac-
tively participated in the plan. Examples
The capital gain part should be shown in box 3 of Form
1099-R or other statement given to you by the payer of the The following examples show how to figure the separate
distribution. tax on Form 4972.

Reduction for federal estate tax. If any federal es- Example 1. Robert C. Smith, who was born in 1935,
tate tax (discussed under Survivors and Beneficiaries, retired from Crabtree Corporation in 2023. He withdrew
later) was paid on the lump-sum distribution, you must de- the entire amount to his credit from the company's quali-
crease the capital gain by the amount of estate tax appli- fied pension plan. In December 2023, he received a total
cable to it. Follow the Form 4972 instructions for Part II, distribution of $175,000 (the $25,000 tax-free part of the
line 6, to figure the part of the estate tax applicable to the distribution consisting of employee contributions plus the
capital gain that is used to reduce the capital gain. If you $150,000 taxable part of the distribution consisting of em-
don't make the capital gain election, enter on line 18 of ployer contributions and earnings on all contributions).
Part III the estate tax attributable to the total lump-sum dis- The payer gave Robert a Form 1099-R (shown below),
tribution. For information on how to figure the estate tax at- which shows the capital gain part of the taxable distribu-
tributable to the lump-sum distribution, see the Instruc- tion (the part attributable to participation before 1974) to
tions for Form 706, United States Estate (and be $10,000. Robert elects 20% capital gain treatment for
Generation-Skipping Transfer) Tax Return, or contact the this part. He enters $10,000 on Form 4972, line 6, and
administrator of the decedent's estate. $2,000 ($10,000 × 20% (0.20)) on line 7.
The ordinary income part of the taxable distribution is
10-Year Tax Option $140,000 ($150,000 – $10,000). Robert elects to figure
the tax on this part using the 10-year tax option. He enters
The 10-year tax option is a special formula used to figure $140,000 on Form 4972, line 8. Then, he completes the
a separate tax on the ordinary income part of a lump-sum rest of Form 4972 and includes the tax of $24,270 in the
distribution. You pay the tax only once, for the year in total on Form 1040, 1040-SR, or 1040-NR, line 16. See
which you receive the distribution, not over the next 10 Robert’s filled-in Form 4972, later.

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                                                       CORRECTED (if checked)
PAYER’S name, street address, city or town, state or province,           1  Gross distribution        OMB No. 1545-0119        Distributions From 
country, ZIP or foreign postal code, and telephone no.                                                                         Pensions, Annuities,
                                                                             175000.00                                                     Retirement or 
                                                                         $
                                                                                                                               Proﬁt-Sharing Plans, 
     Crabtree Corporation Employees’ Pension Plan                        2a  Taxable amount           2023                              IRAs, Insurance 
     1111 Main Street                                                                                                                   Contracts, etc.
     Anytown, Texas 75000                                                $   150000.00                Form  1099-R
                                                                         2b  Taxable amount               Total                            Copy B 
                                                                             not determined               distribution   X
                                                                                                                                           Report this 
PAYER’S TIN                 RECIPIENT’S TIN                              3  Capital gain (included in 4  Federal income tax             income on your 
                                                                            box 2a)                      withheld
                                                                                                                                           federal tax 
     10-0000000                     002-00-XXXX                                                                                            return. If this 
                                                                         $   10000.00                 $         30000.00                   form shows 
RECIPIENT’S name                                                         5  Employee contributions/  6  Net unrealized                  federal income 
                                                                            Designated Roth              appreciation in                tax withheld in 
                                                                            contributions or             employer’s securities             box 4, attach 
     Robert C. Smith                                                        insurance premiums
                                                                         $   25000.00                 $                                    this copy to 
Street address (including apt. no.)                                      7  Distribution     IRA/     8  Other                             your return. 
                                                                            code(s)          SEP/
                                                                                             SIMPLE
     911 Mill Way                                                            7A                                                         This information is 
                                                                                                      $                        %        being furnished to 
City or town, state or province, country, and ZIP or foreign postal code 9a  Your percentage of total 9b  Total employee contributions         the IRS.
     Anytown, Texas 75000                                                    distribution          % $
10  Amount allocable to IRR 11  1st year of desig. 12  FATCA ling       14  State tax withheld       15  State/Payer’s state no.      16  State distribution
     within 5 years                 Roth contrib.      requirement       $                                                             $
$                                                                        $                                                             $
Account number (see instructions)                  13  Date of           17  Local tax withheld       18  Name of locality             19  Local distribution
                                                       payment           $                                                             $
                                                                         $                                                             $
Form 1099-R                         www.irs.gov/Form1099R                                             Department of the Treasury - Internal Revenue Service

24                                                                                                                          Publication 575 (2023)

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                                          Tax on Lump-Sum Distributions                                                     OMB No. 1545-0193
Form  4972                          (From Qualiﬁed Plans of Participants Born Before January 2, 1936)
Department of the Treasury                  Attach to Form 1040, 1040-SR, 1040-NR, or 1041.                                 Attachment2023
Internal Revenue Service                  Go to www.irs.gov/Form4972 for the latest information.                            Sequence No. 28
Name of recipient of distribution                                                                           Identifying number
           Robert C. Smith                                                                                    002-00-XXXX
Part I        Complete this part to see if you can use Form 4972
1     Was  this  a  distribution  of  a  plan  participant’s  entire  balance  (excluding  deductible  voluntary  employee        Yes No
      contributions  and  certain  forfeited  amounts)  from  all  of  an  employer’s  qualied  plans  of  one  kind  (for 
      example, pension, prot-sharing, or stock bonus)? If “No,” don’t use this form  .    .    ...     ...             . .  1          
2     Did you roll over any part of the distribution? If “Yes,” don’t use this form    . . ...      ...     ...              2             
3     Was this distribution paid to you as a beneciary of a plan participant who was born before January 2, 1936?           3             
4     Were you ( )aa plan participant who received this distribution, ( ) bornb before January 2, 1936,     and (c) a 
      participant in the plan for at least 5 years before the year of the distribution?  . .    ...     . . ...              4          
      If you answered “No” to both questions 3 and 4, don’t use this form.
5 a   Did you use Form 4972 after 1986 for a previous distribution from your own plan? If “Yes,” don’t use this 
      form for a 2023 distribution from your own plan  .     .  ...       ...     ...      ....         . . ...              5a            
b     If you are receiving this distribution as a beneciary of a plan participant who died, did you use Form 4972 
      for a previous distribution received as a beneciary of that participant after 1986? If “Yes,”    don’t use this
      form for this distribution  .   . ...     .   ...      ....         . .   .............                                5b
Part II       Complete this part to choose the 20% capital gain elections (see instructions)
6     Capital gain part from Form 1099-R, box 3  .....            .   .   ............                      .             6  10,000
7     Multiply line 6 by 20% (0.20)     . . ......              ...       ....         . . .....          . .             7  2,000
      If you also choose to use Part III, go to line 8. Otherwise, include the amount from line 7 in the total 
      on Form 1040, 1040-SR, or 1040-NR, line 16, or Form 1041, Schedule G, line 1b. Be sure to check 
      box 2 on Form 1040, 1040-SR, or 1040-NR, line 16.
Part III      Complete this part to choose the 10-year tax option (see instructions)
8     If  you  completed  Part  II,  enter  the  amount  from  Form  1099-R,  box  2a,  minus  box  3.  If  you  didn’t 
      complete  Part  II,  enter  the  amount  from  box  2a.  Multiple  recipients  (and  recipients  who  elect  to 
      include net unrealized appreciation (NUA) in taxable income), see instructions .     .    ...     ...               8  140,000
9     Death benet exclusion for a beneciary of a plan participant who died before August 21, 1996  .      .             9 
10    Total taxable amount. Subtract line 9 from line 8  .   .  ...       ...     ...      ....         . . .             10 140,000
11    Current actuarial value of annuity from Form 1099-R, box 8. If none, enter -0-  .    .    ...     . . .             11      -0-
12    Adjusted total taxable amount. Add lines 10 and 11. If this amount is $70,000 or more,        skip lines 13 
      through 16, enter this amount on line 17, and go to line 18 .   .   ...     ...      ...      ....                  12 140,000
13    Multiply line 12 by 50% (0.50), but don’t enter more than $10,000  .      . .    .   13 
14    Subtract $20,000 from line 12. If line 12 is $20,000 or 
      less, enter -0-  .          . ....  ......             .    14 
15    Multiply line 14 by 20% (0.20)  .   . ......              ...       ....         .   15 
16    Minimum distribution allowance. Subtract line 15 from line 13       . .   ...      ...      ...     . .             16 
17    Subtract line 16 from line 12 .   . ...       .    ....     .   .   .....          . .    ......                    17 140,000
18    Federal estate tax attributable to lump-sum distribution    .   .   ...     ...      ...      ....                  18 
19    Subtract line 18 from line 17. If line 11 is zero, skip lines 20 through 22 and go to line 23 .   . . .             19 140,000
20    Divide line 11 by line 12 and enter the result as a decimal (rounded to at least 
      three places) .      .      ... . .....            . .....          . .   ...        20       .
21    Multiply line 16 by the decimal on line 20    .....         .   .   .....            21 
22    Subtract line 21 from line 11     . . ......              ...       ....         .   22 
23    Multiply line 19 by 10% (0.10)  .   . ......              ...       ....         . . .....          . .             23 14,000
24    Tax on amount on line 23. Use the Tax Rate Schedule in the instructions  .       . ...      ...     . .             24 2,227
25    Multiply line 24 by 10.0. If line 11 is zero, skip lines 26 through 28, enter this amount on line 29, and 
      go to line 30  .     .      ... . .......              .  . ...............                                         25 22,270
26    Multiply line 22 by 10% (0.10)  .   . ......              ...       ....         .   26 
27    Tax on amount on line 26. Use the Tax Rate Schedule in the instructions  .       .   27 
28    Multiply line 27 by 10.0  .     . ....        .............                          .    . .....                   28 
29    Subtract line 28 from line 25. Multiple recipients, see instructions  .   . ...      ...      ...     .             29 22,270
30    Tax on lump-sum distribution.       Add lines 7 and 29. Also, include this amount in the total on Form
      1040, 1040-SR, or 1040-NR, line 16 (check box 2), or Form 1041, Schedule G, line 1b         . .   ...               30 24,270
For Paperwork Reduction Act Notice, see instructions.                           Cat. No. 13187U                              Form 4972 (2023)

Publication 575 (2023)                                                                                                                       25

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Example 2.    Mary Brown, who was born in 1935, sold                         as  part  of  the  distribution  from  the  plan.  Box  8  of  Form 
her business in 2023. She withdrew her entire interest in                    1099-R shows that the current actuarial value of the annu-
the qualified profit-sharing plan she had set up as the sole                 ity  is  $10,000.  She  enters  these  figures  on           Form  4972
proprietor.                                                                  (shown later).
The cash part of the distribution, $160,000, is all ordi-                           After  completing  Form  4972,  she  includes  the  tax  of 
nary  income  and  is  shown  on  her Form  1099-R  below.                   $28,070 in the total on Form 1040, 1040-SR, or 1040-NR, 
She  chooses  to  figure  the  tax  on  this  amount  using  the             line 16.
10-year tax option. Mary also received an annuity contract 

                                                           CORRECTED (if checked)
PAYER’S name, street address, city or town, state or province,           1  Gross distribution        OMB No. 1545-0119        Distributions From 
country, ZIP or foreign postal code, and telephone no.                                                                         Pensions, Annuities,
                                                                             160000.00                                                    Retirement or 
                                                                         $
                                                                                                                               Proﬁt-Sharing Plans, 
     Brown’s Real Estate                                                 2a  Taxable amount           2023                             IRAs, Insurance 
     Proﬁt-Sharing Plan
                                                                                                                                       Contracts, etc.
     2101 Chelsea Court                                                  $   160000.00                Form  1099-R
     Anytown, Nevada 89300                                               2b  Taxable amount               Total                           Copy B 
                                                                             not determined               distribution  X
                                                                                                                                          Report this 
PAYER’S TIN                 RECIPIENT’S TIN                              3  Capital gain (included in 4  Federal income tax            income on your 
                                                                            box 2a)                      withheld
                                                                                                                                          federal tax 
   10-0000000                       005-00-XXXX                                                                                           return. If this 
                                                                         $                            $  32000.00                         form shows 
RECIPIENT’S name                                                         5  Employee contributions/   6  Net unrealized                federal income 
                                                                            Designated Roth              appreciation in               tax withheld in 
   Mary Brown                                                               contributions or             employer’s securities            box 4, attach 
                                                                            insurance premiums
                                                                         $   25000.00                 $                                   this copy to 
Street address (including apt. no.)                                      7  Distribution     IRA/     8  Other                            your return. 
                                                                            code(s)          SEP/
                                                                                             SIMPLE
   12 Mill Avenue                                                                                                                      This information is 
                                                                             7A                       $ 10000.00               %       being furnished to 
City or town, state or province, country, and ZIP or foreign postal code 9a  Your percentage of total 9b Total employee contributions     the IRS.
   Anytown, Nevada 89300                                                     distribution       % $
10  Amount allocable to IRR 11      1st year of desig. 12 FATCA ling    14  State tax withheld       15  State/Payer’s state no.     16  State distribution
    within 5 years                  Roth contrib.          requirement   $                                                            $
$                                                                        $                                                            $
Account number (see instructions)                      13  Date of       17  Local tax withheld       18  Name of locality            19  Local distribution
                                                           payment       $                                                            $
                                                                         $                                                            $
Form 1099-R                           www.irs.gov/Form1099R                                           Department of the Treasury - Internal Revenue Service

26                                                                                                                          Publication 575 (2023)

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                                          Tax on Lump-Sum Distributions                                                     OMB No. 1545-0193
Form  4972                          (From Qualiﬁed Plans of Participants Born Before January 2, 1936)
Department of the Treasury                  Attach to Form 1040, 1040-SR, 1040-NR, or 1041.                                 Attachment2023
Internal Revenue Service                  Go to www.irs.gov/Form4972 for the latest information.                            Sequence No. 28
Name of recipient of distribution                                                                           Identifying number
Mary Brown                                                                                                   005-00-XXXX
Part I        Complete this part to see if you can use Form 4972
1     Was  this  a  distribution  of  a  plan  participant’s  entire  balance  (excluding  deductible  voluntary  employee        Yes No
      contributions  and  certain  forfeited  amounts)  from  all  of  an  employer’s  qualied  plans  of  one  kind  (for 
      example, pension, prot-sharing, or stock bonus)? If “No,” don’t use this form  .    .    ...     ...             . .  1          
2     Did you roll over any part of the distribution? If “Yes,” don’t use this form    . . ...      ...     ...              2             
3     Was this distribution paid to you as a beneciary of a plan participant who was born before January 2, 1936?           3             
4     Were you ( )aa plan participant who received this distribution, ( ) bornb before January 2, 1936,     and (c) a 
      participant in the plan for at least 5 years before the year of the distribution?  . .    ...     . . ...              4          
      If you answered “No” to both questions 3 and 4, don’t use this form.
5 a   Did you use Form 4972 after 1986 for a previous distribution from your own plan? If “Yes,”        don’t use this 
      form for a 2023 distribution from your own plan  .     .  ...       ...     ...      ....         . . ...              5a            
b     If you are receiving this distribution as a beneciary of a plan participant who died, did you use Form 4972 
      for a previous distribution received as a beneciary of that participant after 1986? If “Yes,”    don’t use this
      form for this distribution  .   . ...     .   ...      ....         . .   .............                                5b
Part II       Complete this part to choose the 20% capital gain elections (see instructions)
6     Capital gain part from Form 1099-R, box 3  .....            .   .   ............                      .             6 
7     Multiply line 6 by 20% (0.20)     . . ......              ...       ....         . . .....          . .             7 
      If you also choose to use Part III, go to line 8. Otherwise, include the amount from line 7 in the total 
      on Form 1040, 1040-SR, or 1040-NR, line 16, or Form 1041, Schedule G, line 1b. Be sure to check 
      box 2 on Form 1040, 1040-SR, or 1040-NR, line 16.
Part III      Complete this part to choose the 10-year tax option (see instructions)
8     If  you  completed  Part  II,  enter  the  amount  from  Form  1099-R,  box  2a,  minus  box  3.  If  you  didn’t 
      complete  Part  II,  enter  the  amount  from  box  2a.  Multiple  recipients  (and  recipients  who  elect  to 
      include net unrealized appreciation (NUA) in taxable income), see instructions .     .    ...     ...               8    160,000
9     Death benet exclusion for a beneciary of a plan participant who died before August 21, 1996  .      .             9 
10    Total taxable amount. Subtract line 9 from line 8  .   .  ...       ...     ...      ....         . . .             10   160,000
11    Current actuarial value of annuity from Form 1099-R, box 8. If none, enter -0-  .    .    ...     . . .             11      10,000
12    Adjusted total taxable amount. Add lines 10 and 11. If this amount is $70,000 or more, skip lines 13 
      through 16, enter this amount on line 17, and go to line 18 .   .   ...     ...      ...      ....                  12   170,000
13    Multiply line 12 by 50% (0.50), but don’t enter more than $10,000  .      . .    .   13 
14    Subtract $20,000 from line 12. If line 12 is $20,000 or 
      less, enter -0-  .          . ....  ......             .    14 
15    Multiply line 14 by 20% (0.20)  .   . ......              ...       ....         .   15 
16    Minimum distribution allowance. Subtract line 15 from line 13       . .   ...      ...      ...     . .             16 
17    Subtract line 16 from line 12 .   . ...       .    ....     .   .   .....          . .    ......                    17   170,000
18    Federal estate tax attributable to lump-sum distribution    .   .   ...     ...      ...      ....                  18 
19    Subtract line 18 from line 17. If line 11 is zero, skip lines 20 through 22 and go to line 23 .   . . .             19   170,000
20    Divide line 11 by line 12 and enter the result as a decimal (rounded to at least 
      three places) .      .      ... . .....            . .....          . .   ...        20       .   0588
21    Multiply line 16 by the decimal on line 20    .....         .   .   .....            21 
22    Subtract line 21 from line 11     . . ......              ...       ....         .   22       10,000
23    Multiply line 19 by 10% (0.10)  .   . ......              ...       ....         . . .....          . .             23      17,000
24    Tax on amount on line 23. Use the Tax Rate Schedule in the instructions  .       . ...      ...     . .             24            2,917
25    Multiply line 24 by 10.0. If line 11 is zero, skip lines 26 through 28, enter this amount on line 29, and 
      go to line 30  .     .      ... . .......              .  . ...............                                         25      29,170
26    Multiply line 22 by 10% (0.10)  .   . ......              ...       ....         .   26           1,000
27    Tax on amount on line 26. Use the Tax Rate Schedule in the instructions  .       .   27           110
28    Multiply line 27 by 10.0  .     . ....        .............                          .    . .....                   28            1,100
29    Subtract line 28 from line 25. Multiple recipients, see instructions  .   . ...      ...      ...     .             29      28,070
30    Tax on lump-sum distribution.       Add lines 7 and 29. Also, include this amount in the total on Form
      1040, 1040-SR, or 1040-NR, line 16 (check box 2), or Form 1041, Schedule G, line 1b         . .   ...               30      28,070
For Paperwork Reduction Act Notice, see instructions.                           Cat. No. 13187U                              Form 4972 (2023)

Publication 575 (2023)                                                                                                                       27

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b. The joint lives or life expectancies of you and your
beneficiary, or
Rollovers
c. A period of 10 years or more.
If you withdraw cash or other assets from a qualified retire-
2. A required minimum distribution (RMD) (discussed
ment plan in an eligible rollover distribution, you can gen-
later under Tax on Excess Accumulation).
erally defer tax on the distribution by rolling it over to an-
other qualified retirement plan, a traditional IRA, or, after 2 3. Hardship distributions.
years of participation in a SIMPLE IRA sponsored by your
4. Corrective distributions of excess contributions or ex-
employer, a SIMPLE IRA under that plan. You don't in-
cess deferrals, and any income allocable to these dis-
clude the amount rolled over in your income until you re-
tributions, or of excess annual additions and any allo-
ceive it in a distribution from the recipient plan or IRA with-
cable gains (see Corrective distributions of excess
out rolling over that distribution. (For information about
plan contributions under Taxation of Nonperiodic Pay-
rollovers from traditional IRAs, see chapter 1 of Pub.
ments, earlier).
590-A.)
5. A loan treated as a distribution because it doesn’t sat-
If you roll over the distribution to a traditional IRA, you isfy certain requirements either when made or later
can't deduct the amount rolled over as an IRA contribu- (such as upon default), unless the participant's ac-
tion. When you later withdraw it from the IRA, you can't crued benefits are reduced (offset) to repay the loan.
use the optional methods discussed earlier under See Loans Treated as Distributions, earlier, and the
Lump-Sum Distributions to figure the tax. discussion of plan loan offsets, including qualified
Self-employed individuals are generally treated as em- plan loan offsets, under Time for making rollover,
ployees for the rules on the tax treatment of distributions, later.
including the rules for rollovers. 6. Dividends paid on employer securities.
See Designated Roth accounts, later, for information on 7. The cost of life insurance coverage.
rollovers (including in-plan Roth rollovers) related to those
accounts. Also, see Rollovers to Roth IRAs, later, for infor- In addition, a distribution to the plan participant's bene-
mation on rollovers from a qualified retirement plan to a ficiary isn’t generally treated as an eligible rollover distri-
Roth IRA. bution. However, see Qualified domestic relations order
(QDRO) Rollover by surviving spouse, , and Rollovers by
Rollovers to SIMPLE retirement accounts. You can nonspouse beneficiary, later.
also roll over amounts from a qualified retirement plan (as
described next) or an IRA into a SIMPLE retirement ac- Rollover of nontaxable amounts. You may be able to
count as follows. roll over the nontaxable part of a distribution (such as your
after-tax contributions) made to another qualified retire-
1. During the first 2 years of participation in a SIMPLE ment plan that is a qualified employee plan or a 403(b)
retirement account, you may roll over amounts from plan, or to a traditional or Roth IRA. The transfer must be
one SIMPLE retirement account into another SIMPLE made either through a direct rollover to a qualified plan or
retirement account. 403(b) plan that separately accounts for the taxable and
2. After 2 years of participation in a SIMPLE retirement nontaxable parts of the rollover or through a rollover to a
account, you may roll over amounts from a SIMPLE traditional or Roth IRA.
retirement account, a qualified retirement plan, or an If you roll over only part of a distribution that includes
IRA into a SIMPLE retirement account. both taxable and nontaxable amounts, the amount you roll
over is treated as coming first from the taxable part of the
Qualified retirement plan. For this purpose, the follow- distribution.
ing plans are qualified retirement plans. Any after-tax contributions that you roll over into your
traditional IRA become part of your basis (cost) in your
• A qualified employee plan.
IRAs. To recover your basis when you take distributions
• A qualified employee annuity. from your IRA, you must complete Form 8606, Nondeduc-
• A tax-sheltered annuity plan (403(b) plan). tible IRAs, for the year of the distribution. For more infor-
mation, see the Instructions for Form 8606.
• An eligible state or local governmental section 457 de-
ferred compensation plan. Withholding requirements. If an eligible rollover distri-
bution is paid to you, the payer must withhold 20% of it.
Eligible rollover distribution. An eligible rollover distri- This applies even if you plan to roll over the distribution to
bution is any distribution of all or any part of the balance to another qualified retirement plan or to an IRA. However,
your credit in a qualified retirement plan except the follow- you can avoid withholding by choosing the direct rollover
ing. option, discussed later. Also, see Choosing the right op-
1. Any of a series of substantially equal distributions tion at the end of this discussion.
paid at least once a year over: Exceptions. An eligible rollover distribution isn't sub-
a. Your lifetime or life expectancy, ject to withholding to the extent it consists of NUA from

28 Publication 575 (2023)

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employer securities that can be excluded from your gross Example. You receive an eligible rollover distribution of
income. (For a discussion of the tax treatment of a distri- $10,000 from your employer's qualified employee plan.
bution of employer securities, see Figuring the Taxable The payer withholds $2,000, so you actually receive
Amount under Taxation of Nonperiodic Payments, earlier.) $8,000. If you want to roll over the entire $10,000 to post-
In addition, withholding from an eligible rollover distribu- pone including that amount in your income, you will have
tion paid to you isn't required if: to get $2,000 from some other source to add to the $8,000
you actually received.
• The distribution and all previous eligible rollover distri-
If you roll over only $8,000, you must include the $2,000
butions you received during the tax year from the
not rolled over in your income for the distribution year.
same plan (or, at the payer's option, from all your em-
Also, you may be subject to the 10% additional tax on the
ployer's plans) total less than $200; or
$2,000 if it was distributed to you before you reached age
• The distribution consists solely of employer securities, 59 / .1 2
plus cash of $200 or less instead of fractional shares.
Time for making rollover. You must generally complete
Direct rollover option. You can choose to have any part the rollover of an eligible rollover distribution paid to you by
or all of an eligible rollover distribution paid directly to an- the 60th day following the day on which you receive the
other qualified retirement plan that accepts rollover distri- distribution from your employer's plan.
butions or to a traditional or Roth IRA. The IRS may waive the 60-day requirement where the
There is an automatic rollover requirement for manda- failure to do so would be against equity or good con-
tory distributions. A mandatory distribution is a distribution science, such as in the event of a casualty, disaster, or
made without your consent and before you reach age 62 other event beyond your reasonable control.
or normal retirement age, whichever is later. The auto-
matic rollover requirement applies if the distribution is Example. In the previous example, you received the
more than $1,000 and is an eligible rollover distribution. distribution on June 30. To postpone including it in your in-
You can choose to have the distribution paid directly to come, you must complete the rollover by August 29, the
you or rolled over directly to your traditional or Roth IRA or 60th day following June 30.
another qualified retirement plan. If you don't make this
Plan loan offset. A plan loan offset is the amount your
choice, the plan administrator will automatically roll over
employer plan account balance is reduced, or offset, to re-
the distribution into an IRA of a designated trustee or is-
pay a loan from the plan. How long you have to complete
suer.
the rollover of a plan loan offset depends on what kind of
No tax withheld. If you choose the direct rollover op- plan loan offset you have. For tax years beginning after
tion, or have an automatic rollover, no tax will be withheld 2017, if you have a qualified plan loan offset, you will have
from any part of the distribution that is directly paid to the until the due date (including extensions) for your tax return
trustee of the other plan. If any part of the eligible rollover for the tax year in which the offset occurs to complete your
distribution is paid to you, the payer must generally with- rollover.
hold 20% of it for income tax. A qualified plan loan offset occurs when a plan loan
in good standing is offset because your employer plan ter-
Payment-to-you option. If an eligible rollover distribution minates, or because you have a severance from employ-
is paid to you, 20% will generally be withheld for income ment. If your plan loan offset occurs for any other reason,
tax. However, the full amount is treated as distributed to then you have 60 days from the date the offset occurs to
you even though you actually receive only 80%. You must complete your rollover.
generally include in income any part (including the part
withheld) that you don't roll over within 60 days to another Ways to get a waiver of the 60-day rollover require-
qualified retirement plan or to a traditional or Roth IRA. ment. There are three ways to obtain a waiver of the
If you are under age 59 / when a distribution is paid to 1 2 60-day requirement.
you, you may have to pay a 10% tax (in addition to the reg- • You qualify for an automatic waiver.
ular income tax) on the taxable part (including any tax
withheld) that you don't roll over. See Tax on Early Distri- • You self-certify that you meet the requirements of a
butions, later. waiver.
Partial rollovers. If you receive a lump-sum distribu- • You request and receive a private letter ruling granting
tion, it may qualify for special tax treatment. See a waiver.
Lump-Sum Distributions, earlier. However, if you roll over For more information about requesting a waiver of the
any part of the distribution, the part you keep doesn't qual- 60-day rollover requirement, rollovers permitted between
ify for special tax treatment. the various types of retirement plans (including IRAs), and
Rolling over more than amount received. If other topics regarding rollovers, see Rollovers in Pub.
590-A.
! you decide to roll over an amount equal to the dis-
CAUTION tribution before withholding, your contribution to Frozen deposits. If an amount distributed to you be-
the new plan or IRA must include other money (for exam- comes a frozen deposit in a financial institution during the
ple, from savings or amounts borrowed) to replace the
amount withheld.

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60-day period after you receive it, the rollover period is ex- $40,000 rolled over will be ordinary income when he with-
tended. An amount is a frozen deposit if you can't with- draws it from his IRA.
draw it because of either:
Example 3. The facts are the same as in Example 1,
• The bankruptcy or insolvency of the financial institu- except that Paul rolled over only $45,000 of the $60,000
tion, or proceeds from the sale of the stock. The $15,000 pro-
• A restriction on withdrawals by the state in which the ceeds he didn't roll over include part of the gain from the
institution is located because of the bankruptcy or in- stock sale. Paul reports $2,500 ($10,000 ÷ $60,000 ×
solvency (or threat of it) of one or more financial insti- $15,000) as capital gain and $12,500 ($50,000 ÷ $60,000
tutions in the state. × $15,000) as ordinary income.

The 60-day rollover period is extended by the period for Example 4. The facts are the same as in Example 2,
which the amount is a frozen deposit and doesn't end ear- except that Paul rolled over only $25,000 of the $40,000
lier than 10 days after the amount is no longer a frozen de- proceeds from the sale of the stock. The $15,000 pro-
posit. ceeds he didn’t roll over include part of the loss from the
stock sale. Paul reports $3,750 ($10,000 ÷ $40,000 ×
Retirement bonds. If you redeem retirement bonds pur-
$15,000) capital loss and $18,750 ($50,000 ÷ $40,000 ×
chased under a qualified bond purchase plan, you can roll
$15,000) ordinary income.
over the proceeds that exceed your basis tax free into an
IRA or qualified employer plan. Subsequent distributions Property and cash distributed. If both cash and prop-
of those proceeds, however, don't qualify for the 10-year erty were distributed and you didn't roll over the entire dis-
tax option or capital gain treatment. tribution, you may designate what part of the rollover is al-
locable to the cash distribution and what part is allocable
Annuity contracts. If an annuity contract was distributed
to the proceeds from the sale of the distributed property. If
to you by a qualified retirement plan, you can roll over an
the distribution included an amount that isn’t taxable
amount paid under the contract that is otherwise an eligi-
(other than the NUA in employer securities) as well as an
ble rollover distribution. For example, you can roll over a
eligible rollover distribution, you may also designate what
single-sum payment you receive upon surrender of the
part of the nontaxable amount is allocable to the cash dis-
contract to the extent it is taxable and isn't an RMD.
tribution and what part is allocable to the property. Your
Rollovers of property. To roll over an eligible rollover designation must be made by the due date for filing your
distribution of property, you must either roll over the actual tax return, including extensions. You can't change your
property distributed or sell it and roll over the proceeds. designation after that date. If you don't make a designation
You can't keep the distributed property and roll over cash on time, the rollover amount or the nontaxable amount
or other property. must be allocated on a ratable basis.
If you sell the distributed property and roll over all the
Qualified domestic relations order (QDRO). You may
proceeds, no gain or loss is recognized on the sale. The
be able to roll over tax free all or part of a distribution from
sale proceeds (including any portion representing an in-
a qualified retirement plan that you receive under a
crease in value) are treated as part of the distribution and
QDRO. (See Qualified domestic relations order (QDRO)
aren't included in your gross income.
under General Information, earlier.) If you receive the dis-
If you roll over only part of the proceeds, you are taxed
tribution as an employee's spouse or former spouse (not
on the part you keep. You must allocate the proceeds you
as a nonspouse beneficiary), the rollover rules apply to
keep between the part representing ordinary income from
you as if you were the employee.
the distribution (its value upon distribution) and the part
representing gain or loss from the sale (its change in value Rollover by surviving spouse. You may be able to roll
from its distribution to its sale). over tax free all or part of a distribution from a qualified re-
tirement plan you receive as the surviving spouse of a de-
Example 1. On September 4, 2023, Paul received an
ceased employee. The rollover rules apply to you as if you
eligible rollover distribution from his employer's noncontri-
were the employee. You can roll over the distribution into a
butory qualified employee plan of $50,000 in nonemployer
qualified retirement plan or a traditional or Roth IRA. For a
stock. On September 24, 2023, he sold the stock for
rollover to a Roth IRA, see Rollovers to Roth IRAs, later.
$60,000. On October 2, 2023, he contributed $60,000
A distribution paid to a beneficiary other than the em-
cash to a traditional IRA. Paul doesn't include either the
ployee's surviving spouse is generally not an eligible roll-
$50,000 eligible rollover distribution or the $10,000 gain
over distribution. However, see Rollovers by nonspouse
from the sale of the stock in his income. The entire
beneficiary next.
$60,000 rolled over will be ordinary income when he with-
draws it from his IRA. Rollovers by nonspouse beneficiary. If you are a des-
ignated beneficiary (other than a surviving spouse) of a
Example 2. The facts are the same as in Example 1,
deceased employee, you may be able to roll over tax free
except that Paul sold the stock for $40,000 and contrib-
all or a portion of a distribution you receive from an eligible
uted $40,000 to the IRA. Paul doesn't include the $50,000
retirement plan of the employee. The distribution must be
eligible rollover distribution in his income and doesn't de-
a direct trustee-to-trustee transfer to your traditional or
duct the $10,000 loss from the sale of the stock. The

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Roth IRA that was set up to receive the distribution. The can roll over the entire amount (or any portion) to a Roth
transfer will be treated as an eligible rollover distribution IRA. Also, if you are a plan participant in a 401(k), 403(b),
and the receiving plan will be treated as an inherited IRA. or 457(b) plan, your plan may permit you to roll over
For information on inherited IRAs, see What if You Inherit amounts in those plans to a designated Roth account
an IRA? in chapter 1 of Pub. 590-B. within the same plan (in-plan Roth rollover). The rollover of
any untaxed amounts is included in income. See In-plan
How to report. Enter the total distribution (before income Roth rollovers, later.
tax or other deductions were withheld) on Form 1040, A qualified distribution from a designated Roth account
1040-SR, or 1040-NR, line 5a. This amount should be isn't includible in income. (A qualified distribution is de-
shown in box 1 of Form 1099-R. From this amount, sub- fined earlier in the discussion of designated Roth ac-
tract any contributions (usually shown in box 5 of Form counts under Taxation of Periodic Payments).
1099-R) that were taxable to you when made. From that If you roll over only part of an eligible rollover distribu-
result, subtract the amount that was rolled over either di- tion that isn't a qualified distribution and not paid as a di-
rectly or within 60 days of receiving the distribution. Enter rect rollover contribution, the part rolled over is considered
the remaining amount, even if zero, on Form 1040, to be first from the income portion of the distribution.
1040-SR, or 1040-NR, line 5b. Also, enter “Rollover” next
to the line. Example. You receive an eligible rollover distribution
that isn't a qualified distribution from your designated Roth
Written explanation to recipients. The administrator of account. The distribution consists of $11,000 (investment)
a qualified retirement plan must, within a reasonable pe- and $3,000 (income earned). Within 60 days of receipt,
riod of time before making an eligible rollover distribution, you roll over $7,000 into a Roth IRA. The $7,000 consists
provide you with a written explanation. It must tell you of $3,000 of income and $4,000 of investment. Because
about all of the following. you rolled over the part of the distribution that could be in-
• Your right to have the distribution paid tax free directly cluded in gross income (income earned), none of the dis-
to another qualified retirement plan or to a traditional tribution is included in gross income.
or Roth IRA.
In-plan Roth rollovers. If you are a participant in a
• The requirement to withhold tax from the distribution if 401(k), 403(b), or 457(b) plan, your plan may permit you
it isn't directly rolled over. to roll over any vested amounts from those plans to a des-
• The nontaxability of any part of the distribution that ignated Roth account within the same plan. The in-plan
you roll over within 60 days after you receive the distri- Roth rollover must be an eligible rollover distribution (de-
bution. fined earlier under Eligible rollover distribution). Any un-
taxed amounts included in the in-plan Roth rollover must
• Other qualified retirement plan rules that apply, includ- be included in income in the year you receive the distribu-
ing those for lump-sum distributions, alternate payees, tion.
and cash or deferred arrangements. You can make the in-plan Roth rollover by direct trans-
• How the distribution rules of the plan to which you roll fer of the amount from the non-Roth account to your des-
over the distribution may differ from the rules that ap- ignated Roth account within the same plan. The 20%
ply to the plan making the distribution in their restric- mandatory withholding doesn't apply to in-plan Roth roll-
tions and tax consequences. overs made by direct rollover. You can also effect the
in-plan Roth rollover by receiving an eligible rollover distri-
Reasonable period of time. The plan administrator bution from your 401(k), 403(b), or 457(b) plan and within
must provide you with a written explanation no earlier than 60 days depositing it into a designated Roth account in
90 days and no later than 30 days before the distribution is the same plan.
made. However, you can choose to have a distribution Your plan must provide a written explanation of the con-
made less than 30 days after the explanation is provided sequences of making an in-plan Roth rollover. In-plan
as long as the following two requirements are met. Roth rollovers can't be undone. Unlike rollovers to Roth
• You must have the opportunity to consider whether or IRAs, you can't later recharacterize an in-plan Roth roll-
not you want to make a direct rollover for at least 30 over.
days after the explanation is provided. If you received employer securities as a part of
• The information you receive must clearly state that you TIP your in-plan Roth rollover distribution, the rollover
have the right to have 30 days to make a decision. is treated as a distribution for the purpose of NUA.
See Distributions of employer securities, earlier.
Contact the plan administrator if you have any questions
regarding this information.
Mandatory 20% withholding. A payor must normally
Designated Roth accounts. You can roll over an eligible withhold 20% when a rollover distribution is paid to you.
rollover distribution from a designated Roth account into However, some part of your distribution may not be sub-
another designated Roth account or a Roth IRA. If you ject to the mandatory 20% withholding. Otherwise nondis-
want to roll over the part of the distribution that isn't inclu- tributable amounts aren't subject to the mandatory 20%
ded in income, you must make a direct rollover of the en- withholding. An example of otherwise nondistributable
tire distribution (see Direct rollover option, earlier) or you

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amounts is employer matching contributions in a 401(k) Table 1. Comparison of Payment to You
plan. See Payment-to-you option, earlier. Versus Direct Rollover
You can't roll over amounts from your traditional
Result of a payment to Result of a direct
! TSP to your Roth TSP. See Pub. 721 for more de- Affected item you rollover
CAUTION tails.
The payer must withhold
Withholding There is no withholding.
How to report. Enter the total amount of the distribu- 20% of the taxable part.
tion before income tax or deductions were withheld on If you are under age
Form 1040, 1040-SR, or 1040-NR, line 5a. This amount 59 / , a 10% additional 1 2
should be shown in box 1 of Form 1099-R. From this tax may apply to the There is no 10%
amount, subtract any contributions (usually shown in Additional tax taxable part (including additional tax. See Tax
box 5 of Form 1099-R) that were taxable to you when an amount equal to the on Early Distributions.
tax withheld) that isn't
made. Enter the remaining amount, even if zero, on Form rolled over.
1040, 1040-SR, or 1040-NR, line 5b.
Any taxable part Any taxable part isn't
If you must include any amount in your gross in- (including the taxable income to you until later
part of any amount distributed to you from
! come, you may have to increase your withholding When to report
CAUTION or make estimated tax payments. See Pub. 505. withheld) not rolled over the new plan or IRA.
as income
is income to you in the However, see Rollovers
year paid. to Roth IRAs for an
Rollovers to Roth IRAs. You can roll over distributions exception.
directly from a qualified retirement plan (other than a des-
ignated Roth account) to a Roth IRA. You must include in
your gross income distributions from a qualified retirement Qualified settlement income. If you are a qualified tax-
plan (other than a designated Roth account) that you payer and you received qualified settlement income in
would have had to include in income if you hadn't rolled connection with the Exxon Valdez litigation, you can con-
them over into a Roth IRA. You don't include in gross in- tribute all or part of it to an eligible retirement plan. This in-
come any part of a distribution from a qualified retirement cludes a qualified retirement plan. The amount contributed
plan that is a return of contributions to the plan that were can’t exceed $100,000 (reduced by the amount of quali-
taxable to you when paid. In addition, the 10% tax on early fied settlement income contributed to an eligible retire-
distributions doesn't apply. ment plan in prior tax years) or the amount of qualified set-
Any amount rolled over into a Roth IRA is subject to the tlement income received during the tax year. Contributions
same rules for converting a traditional IRA into a Roth IRA. for the year can be made until the due date for filing your
For more information, see Converting From Any Traditional tax return, not including extensions.
IRA Into a Roth IRA in chapter 1 of Pub. 590-A. Qualified settlement income that you contribute to a
qualified retirement plan will be treated as having been rol-
How to report. Enter the total amount of the distribu- led over in a direct trustee-to-trustee transfer within 60
tion before income tax or deductions were withheld on days of the distribution. The amount contributed isn’t in-
Form 1040, 1040-SR, or 1040-NR, line 5a. This amount cluded in your taxable income and it isn’t considered to be
should be shown in box 1 of Form 1099-R. From this investment in the contract.
amount, subtract any contributions (usually shown in You are a qualified taxpayer if you are:
box 5 of Form 1099-R) that were taxable to you when
made. Enter the remaining amount, even if zero, on Form • A plaintiff in the civil action In re Exxon Valdez, No.
1040, 1040-SR, or 1040-NR, line 5b. 89-095-CV (HRH) (Consolidated) (D. Alaska), or
If you must include any amount in your gross in- • The beneficiary of the estate of a plaintiff who ac-
quired the right to receive qualified settlement income
CAUTION or make estimated tax payments. See Pub. 505.
! come, you may have to increase your withholding from that plaintiff and who is the spouse or immediate
relative of that plaintiff.
Choosing the right option. Table 1 may help you decide Qualified settlement income is any interest or punitive
which distribution option to choose. Carefully compare the damage awards which are:
effects of each option. Otherwise includible in income, and
•
• Received in connection with the Exxon Valdez civil ac-
tion described (whether pre- or post-judgment and
whether related to a settlement or a judgment).
Qualified settlement income can be received as periodic
payments or as a lump sum. See Pub. 525 for information
on how to report Exxon Valdez settlement income.

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Special rule for Roth IRAs and designated Roth ac-                 • A tax-sheltered annuity plan (403(b) plan), or
counts. Qualified settlement income that is contributed to 
                                                                   • An eligible state or local governmental section 457 de-
a Roth IRA or a designated Roth account will be:
                                                                     ferred compensation plan (to the extent that any distri-
• Included in your taxable income for the year the quali-            bution is attributable to amounts the plan received in a 
  fied settlement income was received, and                           direct transfer or rollover from one of the other plans 
                                                                     listed here or an IRA).
• Treated as part of your cost basis (investment in the 
  contract) that isn’t taxable when distributed.                   5% rate on certain early distributions from deferred 
                                                                   annuity contracts. If an early withdrawal from a deferred 
                                                                   annuity is otherwise subject to the 10% additional tax, a 
Special Additional Taxes                                           5% rate may apply instead. A 5% rate applies to distribu-
                                                                   tions under a written election providing a specific sched-
To discourage the use of pension funds for purposes other          ule for the distribution of your interest in the contract if, as 
than normal retirement, the law imposes additional taxes           of March 1, 1986, you had begun receiving payments un-
on  early  distributions  of  those  funds  and  on  failures  to  der the election. On line 4 of Form 5329, multiply the line 3 
withdraw the funds timely. Ordinarily, you won't be subject        amount by 5% instead of 10%. Attach an explanation to 
to these taxes if you roll over all early distributions you re-    your return.
ceive,  as  explained  earlier,  and  begin  drawing  out  the 
funds at a normal retirement age in prorated amounts over          Distributions from designated Roth accounts alloca-
your  life  expectancy.  These  special  additional  taxes  are    ble to in-plan Roth rollovers within the 5-year period. 
the taxes on:                                                      If, within the 5-year period starting with the first day of your 
                                                                   tax  year  in  which  you  rolled  over  an  amount  from  your 
• Early distributions, and                                         401(k),  403(b),  or  457(b)  plan  to  a  designated  Roth  ac-
• Excess accumulation (not receiving minimum distribu-             count, you take a distribution from the designated Roth ac-
  tions).                                                          count,  you  may  have  to  pay  the  additional  10%  tax  on 
                                                                   early distributions. You must generally pay the 10% addi-
These taxes are discussed in the following sections.
                                                                   tional  tax  on  any  amount  attributable  to  the  part  of  the 
If  you  must  pay  either  of  these  taxes,  report  them  on    in-plan Roth rollover that you had to include in income (re-
Form 5329. However, you don't have to file Form 5329 if            capture amount). A separate 5-year period applies to each 
you owe only the tax on early distributions and your Form          in-plan Roth rollover. See Figuring your recapture amount, 
1099-R correctly shows code “1” in box 7. Instead, enter           later, to determine the recapture amount, if any.
10% of the taxable part of the distribution on Schedule 2          The  5-year  period  used  for  determining  whether  the 
(Form 1040), line 8. Also check the box on line 8 to indi-         10% early distribution tax applies to a distribution alloca-
cate that you don't have to file Form 5329.                        ble to an in-plan Roth rollover is separately determined for 
                                                                   each in-plan Roth rollover, and isn't necessarily the same 
Even if you don't owe any of these taxes, you may have             as the 5-year period used for determining whether a distri-
to complete Form 5329 and attach it to your Form 1040,             bution is a qualified distribution.
1040-SR, or 1040-NR. This applies if you meet an excep-
tion to the tax on early distributions but box 7 of your Form      Figuring your recapture amount.        For any early dis-
1099-R doesn't indicate an exception.                              tribution in 2023 from your designated Roth account that 
                                                                   is  allocable  to  an  in-plan  Roth  rollover,  you  allocate  the 
                                                                   amount  from  box  10  of  your  2023  Form  1099-R  to  the 
Tax on Early Distributions                                         amounts, if any, you have rolled over into that designated 
                                                                   Roth account.
Most  distributions  (both  periodic  and  nonperiodic)  from 
                                                                   If you haven’t taken a distribution from your designated 
qualified  retirement  plans  and  nonqualified  annuity  con-
                                                                   Roth  account  before  2023,  then  allocate  the  amount  in 
tracts made to you before you reach age 59 /  are subject 1 2
                                                                   box 10 of your 2023 Form 1099-R to the amounts you re-
to an additional tax of 10%. This tax applies to the part of 
                                                                   ported on the lines listed in the Recapture Allocation Chart 
the distribution that you must include in gross income. It 
                                                                   (filling in the Taxable column first, and then the Nontaxable 
doesn't apply to any part of a distribution that is tax free, 
                                                                   column  for  each  year)  until  you  have  covered  the  entire 
such  as  amounts  that  represent  a  return  of  your  cost  or 
                                                                   amount in box 10.
that  were  rolled  over  to  another  retirement  plan.  It  also 
                                                                   If  you  have  taken  a  distribution  from  your  designated 
doesn’t  apply  to corrective  distributions  of  excess  defer-
                                                                   Roth  account  prior  to  2023,  then  allocate  the  amount  in 
rals, excess contributions, or excess aggregate contribu-
                                                                   box 10 of your 2023 Form 1099-R to the amounts you re-
tions  (discussed  earlier  under Taxation  of  Nonperiodic 
                                                                   ported on the lines listed in the Recapture Allocation Chart 
Payments).
                                                                   (filling in the Taxable column first, and then the Nontaxable 
For this purpose, a qualified retirement plan is:                  column for each year). However, don't start at the begin-
                                                                   ning;  instead,  begin  with  the  first  line  that  hasn’t  been 
• A qualified employee plan (including a qualified cash            used fully for a previous distribution.
  or deferred arrangement (CODA) under Internal Reve-              Your recapture amount is the sum of the amounts you 
  nue Code section 401(k)),                                        allocated for 2011 through 2023 under the Taxable column 
• A qualified employee annuity plan,

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Example Recapture Allocation Chart                                                         Keep for Your Records

Tax Year      Taxable                                                    Nontaxable (Basis)
   2010       Form 8606, line 23 . . . . . . . .                         Form 8606, line 22 . . . . . . . . . . .               
   2011       Form 1040, line 16b;* Form                                 Form 1040, line 16a**; Form 
              1040A, line 12b;* or Form                                  1040A, line 12a**; or Form 
              1040NR, line 17b* . . . . . . . . .                        1040NR, line 17a** . . . . . . . . . . .               
   2012       Form 1040, line 16b;* Form                                 Form 1040, line 16a;** Form 
              1040A, line 12b;* or Form                                  1040A, line 12a;** or Form 
              1040NR, line 17b* . . . . . . . . .                        1040NR, line 17a** . . . . . . . . . . .               
   2022       Form 1040, 1040-SR, or                                     Form 1040, 1040-SR, or 
              1040-NR, line 5b* . . . . . . . . .                        1040-NR, line 5a** . . . . . . . . . . .                
   2023       Form 1040, 1040-SR, or                                     Form 1040, 1040-SR, or 
              1040-NR, line 5b* . . . . . . . . .              $30,000   1040-NR, line 5a** . . . . . . . . . . .               $1,500
              Total . . . . . . . . . . . . . . . . . . . . .  $30,000   Total . . . . . . . . . . . . . . . . . . . . . . . .  $1,500
Note. The sum of the totals for each column should equal the amount reported in box 10 of your 2023 Form 1099-R.
* Only include those amounts attributable to an in-plan Roth rollover.
** Only include any contributions (usually box 5 of Form 1099-R) that were taxable to you when made and attributable to an in-plan 
Roth rollover.

in  the Recapture  Allocation  Chart.  You  will  also  include            If distribution code “1” is incorrectly shown on your 
this amount on Form 5329, line 1.                                      TIP Form 1099-R for a distribution received when you 
                                                                           were  age  59 /   or  older,  include  that  distribution 1 2
Example.      You had an in-plan Roth rollover in 2023 of             on Form 5329. Enter exception number “12” on line 2.
$50,000. This is your first in-plan Roth rollover. Your 2023 
Form 1040 or 1040-SR includes $30,000 on line 5b, the                  General  exceptions.     The  tax  doesn’t  apply  to  distri-
taxable  portion  of  the  in-plan  Roth  rollover,  and  $50,000     butions that are:
on line 5a, the in-plan Roth rollover including $20,000 of 
basis.                                                                 • Made as part of a series of substantially equal peri-
In December 2023, at age 57, you took a distribution of                  odic payments (made at least annually) for your life (or 
$35,000  from  your  designated  Roth  account.  The  2023               life expectancy) or the joint lives (or joint life expectan-
Form 1099-R shows the distribution of $35,000 reported in                cies) of you and your designated beneficiary (if from a 
box 1, the taxable portion of the distribution of $3,500 re-             qualified retirement plan, the payments must begin af-
ported in box 2a, and the amount of $31,500 allocable to                 ter separation from service) (see Substantially equal 
the in-plan Roth rollover reported in box 10. Because you                periodic payments, later);
had no in-plan Roth rollovers in prior years, you would al-            • Made because you are totally and permanently disa-
locate the $31,500 reported in box 10 of Form 1099-R as                  bled (see Note, later);
shown in the Example Recapture Allocation Chart.
                                                                       • Made to you because you have received a certification 
The  recapture  amount,  the  amount  subject  to  tax  on 
                                                                         that you are terminally ill; or
early distributions allocable to the in-plan Roth rollover, is 
$30,000 ($31,500 − $1,500). Your amount subject to tax                 • Made on or after the death of the plan participant or 
on  early  distributions  reported  on  Form  5329,  line  1,  for       contract holder.
this  distribution  is  $33,500  ($30,000  allocable  to  Form 
1040 or 1040-SR, line 5b; and $3,500 from box 2a of Form              Disabled. You are considered disabled if you can furnish 
1099-R).                                                              proof that you can't do any substantial gainful activity be-
                                                                      cause  of  your  physical  or  mental  condition.  A  physician 
Exceptions to tax. Certain early distributions are excep-             must determine that your condition can be expected to re-
ted from the early distribution tax. If the payer knows that          sult in death or be of a long, continued, or indefinite dura-
an exception applies to your early distribution, distribution         tion.
code “2,” “3,” or “4” should be shown in box 7 of your Form 
1099-R  and  you  don't  have  to  report  the  distribution  on      Distributions to terminally ill individuals.              You may be 
Form  5329.  If  an  exception  applies  but  distribution  code      able to take a distribution from a qualified retirement plan 
“1”  (early  distribution,  no  known  exception)  is  shown  in      before  reaching  age  59 /   and  not  have  to  pay  the  10% 1 2
box 7, you must file Form 5329. Enter the taxable amount              additional tax on early distributions if you receive the distri-
of the distribution shown in box 2a of your Form 1099-R on            bution on or after the date you have received a certifica-
line 1 of Form 5329. On line 2, enter the amount that can             tion by a physician that you are terminally ill.
be excluded and the exception number shown in the Form 
                                                                      Terminally  ill  individual. You  are  considered  terminally 
5329 instructions.
                                                                      ill if you are certified by a physician as having an illness or 

34                                                                                                      Publication 575 (2023)

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physical  condition  which  can  reasonably  be  expected  to       from service and had begun receiving payments un-
result in death in 84 months or less after the date of the          der the election;
certification.
                                                                 •  From an employee stock ownership plan for dividends 
Certification of terminal illness. A certification of termi-        on employer securities held by the plan;
nal illness must include the following:                          •  From a qualified retirement plan due to an IRS levy of 
• A statement that the individual’s illness or physical             the plan;
  condition can be reasonably expected to result in              •  From elective deferral accounts under 401(k) or 
  death in 84 months or less after the date of certifica-           403(b) plans, or similar arrangements, that are quali-
  tion.                                                             fied reservist distributions;
• A narrative description of the evidence that was used          •  Phased retirement annuity payments made to federal 
  to support the statement of illness or physical condi-            employees (see Pub. 721 for more information on the 
  tion.                                                             phased retirement program); or
• It must include the name and contact information of            •  From a qualified retirement plan (other than an IRA) 
  the physician making the statement.                               for a qualified birth or adoption (for more information, 
• The statement must include the date the physician ex-             see Qualified birth or adoption distributions, later).
  amined the individual or reviewed the evidence provi-          Separation  from  service.      In  order  to  meet  the  re-
  ded by the individual, and the date that the physician         quirements  for  the  first  two  exceptions  in  the  list  above, 
  signed the certification.                                      you must have separated from service in or after the year 
• The statement must include the signature of the physi-         in which you reach age 55 (or the earlier of age 50 or with 
  cian making the statement, and an attestation from the         25 years of service under the plan, whichever is earlier, for 
  physician that, by signing the form, the physician con-        qualified public safety employees and private sector fire-
  firms that the physician composed the narrative de-            fighters).
  scription based on the physician’s examination of the          You can’t separate from service before that year. Wait 
  individual or the physician’s review of the evidence           until you reach the applicable age, described above, and 
  provided by the individual.                                    take a distribution.

However, it is not sufficient evidence for an employee           Example.    George separated from service from his em-
who is a physician to certify the physician’s own terminal       ployer at age 49. In the year he reached age 55, he took a 
illness.                                                         distribution from his retirement plan. Because he separa-
Amount  may  be  repaid.    You  may  repay  an  amount          ted from service before he reached age 55, he didn’t meet 
you  received  because  you  are  certified  terminally  ill  by the requirements for the exception for a distribution made 
making one or more contributions to the plan as long as          from a qualified retirement plan (other than an IRA) after 
the total of those contributions doesn’t exceed the amount       separating from service in or after reaching age 55.
distributed to you as a terminally ill individual.               Qualified  public  safety  employees.        If  you  are  a 
Additional  exceptions  for  qualified  retirement               qualified  public  safety  employee,  distributions  that  are 
plans.   The 10% additional tax doesn’t apply to distribu-       made  from  a  governmental  retirement  plan  may  not  be 
tions that are:                                                  subject  to  the  10%  additional  tax  on  early  distributions. 
                                                                 See Certain distributions to qualified public safety employ-
• From a qualified retirement plan (other than an IRA)           ees, later.
  after your separation from service in or after the year        You are a qualified public safety employee if you provi-
  you reached age 55 (the earlier of age 50 or 25 years          ded police protection, firefighting services, or emergency 
  of service under the plan for qualified public safety          medical services for a state or municipality.
  employees) (see Separation from service, later);               For  tax  years  beginning  after  2015,  the  definition  of 
• From a qualified retirement plan (other than IRA) after        qualified public safety employees is expanded to include:
  your separation from service in or after the year you          •  Federal law enforcement officers,
  reached the earlier of age 50 or 25 years of service 
  under the plan, if you are a private sector firefighter.       •  Federal customs and border protection officers,
• From a qualified retirement plan (other than an IRA) to        •  Federal firefighters,
  an alternate payee under a QDRO;                               •  Air traffic controllers,
• From a qualified retirement plan to the extent you have        •  Nuclear materials couriers,
  deductible medical expenses that exceed 7.5% of 
  your adjusted gross income, whether or not you item-           •  Members of the United States Capitol Police,
  ize your deductions for the year;                              •  Members of the Supreme Court Police, and
• From an employer plan under a written election that            •  Diplomatic security special agents of the United 
  provides a specific schedule for distribution of your en-         States Department of State.
  tire interest if, as of March 1, 1986, you had separated 

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Certain distributions to qualified public safety em- Additional exceptions for nonqualified annuity con-
ployees. The exception to the 10% additional tax for tracts. The tax doesn’t apply to distributions that are:
early distributions applies to distributions made to quali-
• From a deferred annuity contract to the extent alloca-
fied public safety employees and firefighters covered by
ble to investment in the contract before August 14,
private sector retirement plans after separation from serv-
1982;
ice on or after they reach age 50 or with 25 years of serv-
ice under the plan, whichever is earlier. The exception • From a deferred annuity contract under a qualified
also includes distributions to those employees who meet personal injury settlement;
the age or years of service requirement, as described ear- • From a deferred annuity contract purchased by your
lier, who provide services as a corrections officer or as a employer upon termination of a qualified employee
forensic security employee providing for the care, custody, plan or qualified employee annuity plan and held by
and control of forensic patients. your employer until your separation from service; or
Qualified reservist distributions. A qualified reserv- • From an immediate annuity contract (a single premium
ist distribution isn’t subject to the additional tax on early contract providing substantially equal annuity pay-
distributions. A qualified reservist distribution is a distribu- ments that start within 1 year from the date of pur-
tion (a) from elective deferrals under a section 401(k) or chase and are paid at least annually).
403(b) plan, or a similar arrangement; (b) to an individual
ordered or called to active duty (because they are a mem- Substantially equal periodic payments. Payments
ber of a reserve component) for a period of more than 179 are substantially equal periodic payments if they are made
days or for an indefinite period; and (c) made during the in accordance with one of the following methods.
period beginning on the date of the order or call and end- 1. Required minimum distribution method. Under
ing at the close of the active duty period. You must be or- this method, the resulting annual payment is redeter-
dered or called to active duty after September 11, 2001. mined for each year.
You can choose to recontribute part or all of the 2. Fixed amortization method. Under this method, the
TIP distributions to an IRA. These additional contribu- resulting annual payment is determined once for the
tions must be made within 2 years after your ac- first distribution year and remains the same amount
tive-duty period ends. Any amount recontributed must be for each succeeding year.
reported on Form 8606 as a nondeductible contribution.
You can’t take a deduction for these contributions. How- 3. Fixed annuitization method. Under this method, the
ever, the normal dollar limitations for contributions to IRAs resulting annual payment is determined once for the
don't apply to these special contributions, and you can first distribution year and remains the same amount
make regular contributions to your IRA, up to the amount for each succeeding year.
otherwise allowable. For information on these methods, see Notice 2022-6 at
IRS.gov/irb/2022-05_IRB#NOT-2022-06.
Qualified birth or adoption distributions. A qualified
birth or adoption distribution isn't subject to the additional A change from method (2) or (3) to method (1)
tax on early distributions. An individual can receive up to TIP isn’t treated as a modification to which the recap-
$5,000 from an applicable eligible retirement plan for a ture tax (discussed next) applies.
distribution made during the 1-year period beginning on
the date on which a child of the individual is born or the Note. For a series of substantially equal periodic pay-
date on which the legal adoption by the individual of an eli- ments starting in 2022, you may apply the guidance either
gible adoptee is finalized. For more information on quali- in Notice 2022-6, or in Revenue Ruling 2002-62 which is
fied birth or adoption distributions, see Notice 2020-68, on page 710 of Internal Revenue Bulletin 2002-42 at
which is on page 567 of Internal Revenue Bulletin 2020-38 IRS.gov/pub/irs-irbs/irb02-42.pdf.
at IRS.gov/pub/irs-irb20-38.pdf. Distributions received as periodic payments on or
Repayment of qualified birth or adoption distribu- TIP after December 29, 2022, will not fail to be treated
tions limited to 3 years. If you received a qualified birth as substantially equal merely because they are re-
or adoption distribution after December 29, 2022, you may ceived as an annuity.
repay the distribution by making one or more contributions
to a qualified plan during the 3-year period beginning on Recapture tax for changes in distribution method
the day after the date on which the distribution was re- under equal payment exception. An early distribution
ceived. For distributions received on or before December recapture tax may apply if, before you reach age 59 / , the 1 2
29, 2022, you may repay the distribution during the period distribution method under the equal periodic payment ex-
that begins after the distribution was received and ending ception changes (for reasons other than your death or dis-
on the date before January 1, 2026. ability). The tax applies if the method changes from the
method requiring equal payments to a method that
wouldn’t have qualified for the exception to the tax. The re-
capture tax applies to the first tax year to which the
change applies. The amount of tax is the amount that

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would have been imposed had the exception not applied,              from  the  total  shortfall  you  figured  without  regard  to  the 
plus interest for the deferral period.                              waiver and enter the result on line 54.
The  recapture  tax  also  applies  after  you  reach  age 
59 /   if  your  payments  under  a  distribution  method  that 1 2 State  insurer  delinquency  proceedings.            You  might 
                                                                    not receive the minimum distribution because assets are 
qualifies for the exception are modified within 5 years of 
                                                                    invested in a contract issued by an insurance company in 
the date of the first payment. In that case, the tax applies 
only to payments distributed before you reach age 59 / .1 2         state  insurer  delinquency  proceedings.  If  your  payments 
                                                                    are  reduced  below  the  minimum  because  of  these  pro-
Report the recapture tax and interest on line 4 of Form 
                                                                    ceedings, you should contact your plan administrator. Un-
5329.  Attach  an  explanation  to  the  form.  Don’t  enter  the 
                                                                    der certain conditions, you won’t have to pay the 50% tax.
explanation next to the line or enter any amount for the re-
capture on line 1 or 3 of the form.                                 Required beginning date.       Unless the rule for 5% own-
                                                                    ers applies, you must generally begin to receive distribu-
Tax on Excess Accumulation                                          tions from your qualified retirement plan by April 1 of the 
                                                                    year that follows the later of:
To  make  sure  that  most  of  your  retirement  benefits  are 
paid to you during your lifetime, rather than to your benefi-       • The calendar year in which you reach age 73, or
ciaries  after  your  death,  the  payments  that  you  receive     • The calendar year in which you retire from employ-
from  qualified  retirement  plans  must  begin  no  later  than      ment with the employer maintaining the plan.
your required  beginning  date  (defined  later).  The  pay-        However,  your  plan  may  require  you  to  begin  to  receive 
ments each year can’t be less than the RMD.                         distributions by April 1 of the year that follows the year in 
If  the  actual  distributions  to  you  in  any  year  are  less   which you reach age 73 even if you haven’t retired.
than  the  RMD  for  that  year,  you  are  subject  to  an  addi-
                                                                    5% owners.      If you are a 5% owner, you must begin to 
tional tax. The tax equals 50% of the part of the RMD that 
                                                                    receive  distributions  from  the  plan  by  April  1  of  the  year 
wasn’t distributed.
                                                                    that follows the calendar year in which you reach age 73. 
For this purpose, a qualified retirement plan includes:             This rule doesn’t apply if your retirement plan is a govern-
• A qualified employee plan,                                        mental or church plan.
                                                                    You are a 5% owner if, for the plan year ending in the 
• A qualified employee annuity plan,                                calendar year in which you reach age 73, you own (or are 
• An eligible section 457 deferred compensation plan,               considered to own under section 318 of the Internal Reve-
  or                                                                nue  Code)  more  than  5%  of  the  outstanding  stock  (or 
                                                                    more than 5% of the total voting power of all stock) of the 
• A tax-sheltered annuity plan (403(b) plan) (for benefits          employer, or more than 5% of the capital or profits interest 
  accruing after 1986).                                             in the employer.

Reduced tax rate for excess accumulations.          The ad-         Required distributions. By the required beginning date, 
ditional  tax  rate  for  distributions  that  are  less  than  the you must either:
RMD amount (excess accumulations) is reduced to 25% 
for tax years beginning in 2023 and after.                          • Receive your entire interest in the plan (for a tax-shel-
You may be subject to a reduced additional tax rate of                tered annuity, your entire benefit accruing after 1986), 
10% of the amount not distributed if, during the correction           or
window, you take a distribution of the amount on which the          • Begin receiving periodic distributions in annual 
tax is due and submit a tax return reflecting this additional         amounts calculated to distribute your entire interest 
tax.                                                                  (for a tax-sheltered annuity, your entire benefit accru-
The “correction window” is the period of time beginning               ing after 1986) over your life or life expectancy or over 
on the date on which the additional tax is imposed on the             the joint lives or joint life expectancies of you and a 
distribution shortfall and ends on the earliest of:                   designated beneficiary (or over a shorter period).
• The date of mailing the deficiency notice with respect            After  the  starting  year  for  periodic  distributions,  you 
  to the imposition of this tax;                                    must receive at least the RMD for each year by December 
• The date the tax is assessed; or                                  31 of that year. (The starting year is the year in which you 
                                                                    reach  age  73  or  retire,  whichever  applies  in  determining 
• The last day of the second tax year that begins after             your required beginning date.) If no distribution is made in 
  the date of the tax year in which the additional tax is           your starting year, the RMDs for 2 years must be made the 
  imposed.                                                          following year (one by April 1 and one by December 31).
Waiver. The tax may be waived if you establish that the             Distributions after the employee's death.            If the em-
shortfall in distributions was due to reasonable error and          ployee  was  receiving  periodic  distributions  before  their 
that  reasonable  steps  are  being  taken  to  remedy  the         death and the employee dies after the required beginning 
shortfall. If you believe you qualify for this relief, you must     date, any payments not made as of the time of death must 
file  Form  5329.  Enter  “RC”  and  the  amount  you  want         generally  be  distributed  at  least  as  rapidly  as  under  the 
waived in parentheses on the dotted line next to line 54,           distribution method being used at the date of death.
and  attach  a  letter  of  explanation.  Subtract  this  amount 

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In addition, if distributions are being made from a de- special rule applicable to surviving spouses doesn’t apply
fined contribution plan and the employee's beneficiary is to the new spouse.
not an eligible designated beneficiary, any payments not If distributions from a defined contribution plan began
made as of the time of death must be distributed within 10 under Rule 3 and the eligible designated beneficiary dies
years after the death of the employee. An eligible designa- or a beneficiary who is a minor child reaches majority, dis-
ted beneficiary is the employee's spouse, the employee's tributions must be completed by December 31 of the 10th
child who has not reached majority, a disabled individual, year following the year of the beneficiary's death or the
a chronically ill individual, or an individual not more than child reaching majority.
10 years younger than the employee.
If the employee dies before the required beginning Minimum distributions from an annuity plan. Special
date, the entire account must be distributed under one of rules may apply if you receive distributions from your re-
the following rules. tirement plan in the form of an annuity. Your plan adminis-
trator should be able to give you information about these
• Rule 1. The distribution must be completed by De- rules.
cember 31 of the 5th year following the year of the em-
ployee's death if the employee was a participant in a Minimum distributions from an individual account
defined benefit plan or if there's no designated benefi- plan. Your plan administrator should be able to give you
ciary. information about how the amount of your RMD was fig-
• Rule 2. The distribution must be completed by De- ured.
cember 31 of the 10th year following the year of the If there is an account balance to be distributed from
employee's death if the employee was a participant in your plan (not as an annuity), your plan administrator must
a defined contribution plan and designated an individ- figure the minimum amount that must be distributed from
ual as the beneficiary under the plan. the plan each year.
• Rule 3. The distribution must be made in annual What types of installments are allowed? The mini-
amounts over the life of an individual designated as a mum amount that must be distributed for any year may be
beneficiary under a defined benefit plan or life expect- made in a series of installments (for example, monthly or
ancy of an eligible designated beneficiary under a de- quarterly) as long as the total payments for the year made
fined contribution plan. by the date required aren’t less than the minimum amount
required for the year.
The terms of the plan may determine which of these
three rules applies. If the plan permits the employee or the More than minimum. Your plan can distribute more in
eligible designated beneficiary to choose the rule that ap- any year than the minimum amount required for that year;
plies, this choice must be made by the earliest date a dis- but if it does, you won’t receive credit for the additional
tribution would be required under either of the rules. Gen- amount in determining the minimum amount required for
erally, this date is December 31 of the year following the future years. However, any amount distributed in your
year of the employee's death. starting year will be credited toward the amount required
If the employee or the eligible designated beneficiary to be distributed by April 1 of the following year.
didn’t choose a rule and the plan doesn’t specify the rule
that applies, distribution must be made under Rule 3 if the Combining multiple accounts to satisfy the minimum
employee has an eligible designated beneficiary (or in the distribution requirements. Generally, the RMD must be
case of a defined benefit plan, an individual was designa- figured separately for each account. Each qualified em-
ted as the beneficiary under the plan) or under Rule 2 if ployee retirement plan and qualified annuity plan must be
the employee was a participant in a defined contribution considered individually in satisfying its distribution require-
plan, and has designated an individual as the beneficiary ments. However, if you have more than one tax-sheltered
under the plan, but that individual isn't an eligible designa- annuity account, you can total the RMDs and then satisfy
ted beneficiary. If an employee doesn't have a designated the requirement by taking distributions from any one (or
beneficiary, distribution must be made under Rule 1. more) of the tax-sheltered annuities.
Distributions under Rule 3 must generally begin by De-
cember 31 of the year following the year of the employee's
death. However, if the surviving spouse is the beneficiary, Survivors and Beneficiaries
distributions need not begin until December 31 of the year
the employee would have reached age 73, if later. Generally, a survivor or beneficiary reports pension or an-
If the surviving spouse is the designated beneficiary nuity income in the same way the plan participant would
and distributions are to be made under Rule 3, a special have reported it. However, some special rules apply, and
rule applies if the spouse dies after the employee but be- they are covered elsewhere in this publication as well as in
fore distributions are required to begin. In this case, distri- this section.
butions may be made to the spouse's beneficiary under
either Rule 1, Rule 2, or Rule 3 as though the beneficiary Estate tax deduction. You may be entitled to a deduc-
were the employee's beneficiary and the employee died tion for estate tax if you receive amounts included in your
on the spouse's date of death. However, if the surviving income as income in respect of a decedent under a joint
spouse remarries after the employee's death and the new and survivor annuity that was included in the decedent's
spouse is designated as the spouse's beneficiary, this estate. You can deduct the part of the total estate tax that

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was based on the annuity, provided that the decedent died Simplified Method under Taxation of Periodic Payments,
after their annuity starting date. (For details, see Regula- earlier.
tions section 1.691(d)-1.) Deduct it in equal amounts over
Guaranteed payments. If you receive guaranteed
your remaining life expectancy.
payments as the decedent's beneficiary under a life annu-
If the decedent died before the annuity starting date of
ity contract, don’t include any amount in your gross in-
a deferred annuity contract and you receive a death bene-
come until your distributions plus the tax-free distributions
fit under that contract, the amount you receive (either in a
received by the life annuitant equal the cost of the con-
lump sum or as periodic payments) in excess of the dece-
tract. All later distributions are fully taxable. This rule
dent's cost is included in your gross income as income in
doesn’t apply if it is possible for you to collect more than
respect of a decedent for which you may be able to claim
the guaranteed amount. For example, it doesn’t apply to
an estate tax deduction.
payments under a joint and survivor annuity.
You can take the estate tax deduction as an itemized
deduction on Schedule A (Form 1040). This deduction
isn’t subject to the 2%-of-adjusted-gross-income limit on
miscellaneous deductions. See Pub. 559, Survivors, Ex- Disaster-Related Relief
ecutors, and Administrators, for more information on the
estate tax deduction.
Introduction
Survivors of employees. Distributions the beneficiary of
a deceased employee gets may be accrued salary pay- The special rules that provide for tax-favored withdrawals
ments; distributions from employee profit-sharing, pen- and repayments from certain qualified plans for taxpayers
sion, annuity, or stock bonus plans; or other items. Some who suffered an economic loss as a result of a qualified
of these should be treated separately for tax purposes. disaster were made permanent by the SECURE 2.0 Act of
The treatment of these distributions depends on what they 2022. See Qualified disaster recovery distributions and
represent. Qualified Disaster Distributions, later, for more informa-
Salary or wages paid after the death of the employee tion.
are usually the beneficiary's ordinary income. If you are a
The principles set forth in Notice 2005-92, 2005-51
beneficiary of an employee who was covered by any of the
I.R.B. 1165, available at IRS.gov/irb/2005-51_IRB (which
retirement plans mentioned, you can exclude from income
provides guidance on the tax-favored treatment of distri-
nonperiodic distributions received that totally relieve the
butions for victims of Hurricane Katrina), and Notice
payer from the obligation to pay an annuity. The amount
2020-50, 2020-28 I.R.B. 35, available at IRS.gov/IRB/
that you can exclude is equal to the deceased employee's
2020-28_IRB (which provides guidance on the tax-favored
investment in the contract (cost).
treatment of distributions for individuals impacted by the
If you are entitled to receive a survivor annuity on the
coronavirus pandemic), generally also apply to these
death of an employee, you can exclude part of each annu-
rules.
ity payment as a tax-free recovery of the employee's in-
vestment in the contract. You must figure the taxable and If you received a qualified disaster recovery distribution
tax-free parts of each payment using the method that ap- or a qualified disaster distribution (both defined later), it is
plies as if you were the employee. For more information, taxable but isn’t subject to the 10% additional tax on early
see Taxation of Periodic Payments, earlier. distributions. (Use Form 8915-F to figure the taxable por-
tion of the distribution.) However, the distribution is inclu-
Survivors of retirees. Benefits paid to you as a survivor ded in income ratably over 3 years unless you elect to re-
under a joint and survivor annuity must be included in your port the entire amount in the year of distribution. For
gross income. Include them in income in the same way the example, if you received a $60,000 qualified disaster dis-
retiree would have included them in gross income. See tribution in 2020, you can include $20,000 in your income
Partly Taxable Payments under Taxation of Periodic Pay- in 2020, 2021, and 2022. However, you can elect to in-
ments, earlier. clude the entire distribution in your income in the year it
If the retiree reported the annuity under the 3-year Rule was received. Also, you can repay the distribution and not
and recovered all of the cost tax free, your survivor pay- be taxed on the distribution. See Repayment of Qualified
ments are fully taxable. Disaster Distributions, later.
If the retiree was reporting the annuity under the Gen-
eral Rule, you must apply the same exclusion percentage The distribution limit for qualified disaster recov-
to your initial survivor annuity payment called for in the ! ery distributions is not the same as the limit for
contract. The resulting tax-free amount will then remain CAUTION qualified disaster distributions. See Distribution
fixed for the initial and future payments. Increases in the limit for qualified disaster recovery distributions and Distri-
survivor annuity are fully taxable. See Pub. 939 for more bution limit for qualified disaster distributions, later, for
information on the General Rule. more information.
If the retiree was reporting the annuity under the Simpli-
fied Method, the part of each payment that is tax free is If you received a distribution from an eligible retirement
the same as the tax-free amount figured by the retiree at plan to purchase or construct a main home but didn’t pur-
the annuity starting date. This amount remains fixed even chase or construct a main home because of a major dis-
if the annuity payments are increased or decreased. See aster, you may be able to repay the distribution and not

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pay income tax or the 10% additional tax on early distribu- days after the applicable date with respect to such dis-
tions. See Recontribution of Qualified Distributions for the aster, and
Purchase or Construction of a Main Home, later.
• Made to an individual whose principal place of abode
Use Forms 8915-C, 8915-D, and 8915-F to report quali- at any time during such qualified disaster is located in
fied disaster distributions and repayments. Also report re- the qualified disaster area, and
contributions of qualified distributions for home purchases That individual has sustained an economic loss by
•
and construction that were canceled because of qualified reason of such qualified disaster.
2018, 2019, 2020, or later disasters on Form 8915-C,
8915-D, or 8915-F, as applicable. Economic loss. Qualified disaster distributions are per-
mitted without regard to your need or the actual amount of
Qualified Disaster Recovery your economic loss. Examples of an economic loss in-
clude, but aren’t limited to:
Distributions
1. Loss, damage to, or destruction of real or personal
A qualified disaster recovery distribution is a qualified dis- property from fire, flooding, looting, vandalism, theft,
aster distribution that meets certain criteria as described wind, or other cause;
in the SECURE 2.0 Act of 2022. It is a distribution made
from an eligible retirement plan to an individual whose 2. Loss related to displacement from your home; or
main home was in a qualified disaster area during the pe- 3. Loss of livelihood due to temporary or permanent lay-
riod described under Qualified disaster recovery distribu- offs.
tion, later. This individual must have sustained an eco-
nomic loss because of the disaster. Eligible retirement plan. An eligible retirement plan can
be any of the following.
Main home (principal place of abode). Generally, your
main home is the home where you live most of the time. A • A qualified pension, profit-sharing, or stock bonus
temporary absence due to special circumstances, such as plan (including a 401(k) plan).
illness, education, business, military service, evacuation, • The federal Thrift Savings Plan.
or vacation, won’t change your main home.
• A qualified annuity plan.
Qualified disaster. A qualified disaster means any major • A tax-sheltered annuity contract.
disaster declared by the President under section 401 of
the Robert T. Stafford Disaster Relief and Emergency As- • A governmental section 457 deferred compensation
sistance Act after December 27, 2020. plan.
Qualified disaster area. A qualified disaster area • A traditional, SEP, SIMPLE, or Roth IRA (including
means any area with respect to which the major disaster Roth SEP and SIMPLE IRAs).
was declared under the Robert T. Stafford Disaster Relief Applicable date. The term “applicable date” means
and Emergency Assistance Act. This term does not in- the latest of:
clude any area which is a qualified disaster area solely by
reason of section 301 of the Taxpayer Certainty and Dis- • December 29, 2022;
aster Tax Relief Act of 2020. • The first date of the incident period for the qualified
A qualified disaster area under section 301 of the disaster; or
! Taxpayer Certainty and Disaster Tax Relief Act of • The declaration date of the qualified disaster.
CAUTION 2020 would be a major disaster that was declared
by the President during the period between January 1, Distribution limit for qualified disaster recovery dis-
2020, and February 25, 2021. Also, this disaster must tributions. The total of your qualified disaster recovery
have an incident period that began on or after December distributions from all plans is limited to $22,000 per disas-
28, 2019, and on or before December 27, 2020, and must ter. If you take distributions from more than one type of
have ended no later than January 26, 2021. The definition plan, such as a 401(k) plan and an IRA, and the total
of a qualified disaster loss does not extend to any major amount of your distribution exceeds $22,000, you may al-
disaster which has been declared only by reason of locate the $22,000 limit among the plans by any reasona-
COVID-19. ble method you choose.

Incident period. The incident period for any qualified Qualified Disaster Distributions
disaster is the period specified by the Federal Emergency
Management Agency (FEMA) as the period during which The definition of a qualified disaster distribution is a distri-
the disaster occurred. bution made from an eligible retirement plan to an individ-
ual whose main home was in a qualified disaster area (de-
Qualified disaster recovery distribution. A qualified scribed next) at any time during that disaster’s incident
disaster recovery distribution is any distribution: period and who sustained an economic loss because of
• Made on or after the first day of the incident period of the disaster.
a qualified disaster and before the date that is 180

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Qualified disaster area for qualified disaster distri- you are receiving substantially equal periodic payments
butions. A qualified disaster area is any area with re- from a qualified retirement plan, the receipt of a qualified
spect to which a major disaster was declared after 2017 disaster distribution from that plan won't be treated as a
and before February 26, 2021, by the President under change in those substantially equal payments merely be-
section 401 of the Robert T. Stafford Disaster Relief and cause of the qualified disaster distribution. However, any
Emergency Assistance Act, except the California wildfire distributions you received in excess of the $100,000 quali-
disaster area defined in the Bipartisan Budget Act of fied disaster distribution limit may be subject to the addi-
2018, or any area with respect to which a major disaster tional tax on early distributions.
has been declared solely due to COVID-19.
Incident period for qualified distributions. The inci- Repayment of Qualified Disaster
dent period for any qualified disaster is the period speci- Distributions
fied by the Federal Emergency Management Agency
(FEMA) as the period during which the disaster occurred, If you choose, you can generally repay any portion of a
but not including any dates before 2018. This includes qualified disaster distribution that is eligible for tax-free
those disasters that occurred on or after December 28, rollover treatment to an eligible retirement plan. Also, you
2020, and continued no later than January 26, 2021. can repay a qualified disaster distribution made on ac-
count of a hardship from a retirement plan. However, see
Qualified disaster distribution. A qualified disaster dis- Exceptions, later, for qualified disaster distributions you
tribution for 2018, 2019, and 2020 disasters are those dis- can't repay.
tributions from an eligible retirement plan:
You have 3 years from the day after the date you re-
1. Made on or after the first day of the incident period of ceived the distribution to make a repayment. The amount
a qualified disaster and before June 17, 2020 (June of your repayment can't be more than the amount of the
25, 2021, for a qualified 2020 disaster); original distribution. Amounts that are repaid are treated
2. Made to an individual whose main home at any time as a trustee-to-trustee transfer and aren't included in in-
during the incident period of such qualified disaster come. Also, for purposes of the one-rollover-per-year limi-
was in the qualified disaster area; and tation for IRAs, a repayment to an IRA isn't considered a
rollover. For more information on how to report distribu-
3. That individual sustained an economic loss because tions and repayments, see the Instructions for Form
of the disaster. 8915-C (in the case of qualified 2018 disasters), the In-
structions for Form 8915-D (in the case of qualified 2019
Distribution limit for qualified disaster distributions. disasters), or the Instructions for Form 8915-F (in the case
The total of your qualified disaster distributions from all of qualified disasters that occurred in 2020 and later
plans is limited to $100,000 per disaster for certain major years).
disasters that occurred in 2018, 2019, and 2020. If you
take distributions from more than one type of plan, such Exceptions. You can't repay the following types of distri-
as a 401(k) plan and an IRA, and the total amount of your butions.
distributions exceeds $100,000 for a single disaster, you
1. Qualified disaster distributions received as a benefi-
may allocate the $100,000 limit among the plans by any
ciary (other than as a surviving spouse).
reasonable method you choose.
2. RMDs.
Example. In 2020, you received a distribution of
$50,000. In 2021, you received a distribution of $125,000 3. Periodic payments (other than from an IRA) that are
for the same disaster. Separately, each distribution met for:
the requirements for a qualified disaster distribution. If you a. A period of 10 years or more,
had decided to treat the entire $50,000 received in 2020
as a qualified disaster distribution, only $50,000 of the b. Your life or life expectancy, or
2021 distribution could've been treated as a qualified dis- c. The joint lives or joint life expectancies of you and
aster distribution for the same disaster. your beneficiary.

Taxation of Qualified Disaster Repayment of distributions if reporting under the
1-year election. If you elect to include all of your quali-
Distributions
fied disaster distributions received in a year in income for
Qualified disaster distributions are included in income in that year and then repay any portion of the distributions
equal amounts over 3 years. However, if you elect, you during the allowable 3-year period, the amount repaid will
can include the entire distribution in your income in the reduce the amount included in income for the year of dis-
year it was received. tribution. If the repayment is made after the due date (in-
cluding extensions) for your return for the year of distribu-
Qualified disaster distributions aren’t subject to the tion, you will need to file, with an amended return, a
10% additional tax (or the additional 25% tax for certain revised Form 8915-C (if the repayment is of a qualified
distributions from SIMPLE IRAs) on early distributions 2018 disaster distribution), a revised Form 8915-D (if the
from qualified retirement plans (including IRAs). Also, if repayment is of a qualified 2019 disaster distribution), or a

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revised  Form  8915-F  (in  the  case  of  qualified  disasters        Applicable  recontribution  period.    You  can  make  this 
that  occurred  in  2020  and  later  years).  See Amending            recontribution (or recontributions):
Your Return, later.
                                                                       • On or after the first day of the incident period of the 
Example.   Maria received a $19,000 qualified disaster                   qualified disaster and before June 17, 2020, for quali-
recovery distribution on February 15, 2023. After receiving              fied 2018 and 2019 disasters;
a reimbursement from her insurance company for a casu-                 • On or after the first day of the incident period of the 
alty loss, Maria repays the $19,000 qualified disaster re-               qualified disaster and before June 25, 2021, for quali-
covery  distribution  on  September  10,  2023.  She  reports            fied 2020 disasters; or
the distribution and repayment on Form 8915-F, which she 
files with her timely filed 2023 tax return. As a result, no           • On or after the first day of the incident period of a 
                                                                         qualified disaster under the SECURE 2.0 Act of 2020 
portion of the distribution is included in income on her re-
                                                                         and ending on the date which is 180 days after the ap-
turn.
                                                                         plicable date for that disaster.
Repayment  of  distributions  if  reporting  under  the 
                                                                       Note.   A qualified disaster under the SECURE 2.0 Act 
3-year method.  If you are reporting the distribution in in-
                                                                       of  2020  is  any  major  disaster  declared  by  the  President 
come over the 3-year period and you repay any portion of 
                                                                       under section 401 of the Robert T. Stafford Disaster Relief 
the distribution to an eligible retirement plan before filing 
                                                                       and Emergency Assistance Act after December 27, 2020.
your  tax  return,  the  repayment  will  reduce  the  portion  of 
the  distribution  that  is  included  in  income  for  the  year.  If Qualified  home  purchase  distribution. To  be  a  quali-
you  repay  a  portion  after  the  due  date  (including  exten-      fied  distribution,  the  distribution  must  meet  all  of  the  fol-
sions) for filing your return, the repayment will reduce the           lowing requirements.
portion  of  the  distribution  that  is  included  in  income  on 
your next year’s return, unless you are eligible to amend              • The distribution is a hardship distribution from a 401(k) 
your applicable prior year return or returns. (This would be             plan, a hardship distribution from a tax-sheltered an-
a  return  for  a  year  beginning  the  year  of  the  distribution     nuity plan (403(b) plan), or a qualified first-time home-
and included in the 3-year period.)                                      buyer distribution from an IRA.
      If,  during  a  year  in  the  3-year  period,  you  repay       • The distribution was received during the period begin-
TIP   more  than  is  otherwise  includible  in  income  for             ning on the date that is 180 days before the first day of 
      that  year,  the  excess  may  be  carried  forward  or            the incident period of the qualified disaster and ending 
back  to  reduce  the  amount  included  in  income  for  the            on the date that is 30 days after the last day of such 
year.                                                                    incident period.
                                                                       • The distribution was to be used to purchase or con-
Example.   John  received  a  $18,000  qualified  disaster               struct a main home in the disaster area and the home 
recovery  distribution  on  November  15,  2023.  He  doesn’t            wasn't purchased or constructed because of the dis-
elect to include the entire distribution in his 2023 income              aster.
but elects to included $6,000 on each of his 2023, 2024, 
and  2025  returns.  On  November  10,  2024,  John  repays            Any amount that is recontributed during the       applicable 
$9,000. He makes no other repayments during the allowa-                recontribution  period  is  treated  as  a  trustee-to-trustee 
ble 3-year period. John may report the distribution and re-            transfer and is not included in income.
payment in either of the following ways.
                                                                       A qualified distribution not recontributed during the   ap-
•  Report $0 in income on his 2024 return and carry the                plicable recontribution period may be taxable for the year 
   $3,000 excess repayment ($9,000 – $6,000) forward                   distributed  and  subject  to  the  additional  10%  tax  (or  the 
   to 2025 and reduce the amount reported in that year                 additional 25% tax for certain SIMPLE IRAs) on early dis-
   to $3,000.                                                          tributions.
•  Report $0 income on his 2024 return, report $6,000 on 
                                                                       See Form 8915-C (for qualified 2018 disaster distribu-
   his 2025 return, and file an amended return for 2023 to 
                                                                       tions), Form 8915-D (for qualified 2019 disaster distribu-
   reduce the amount previously included in income to 
                                                                       tions), or Form 8915-F (for qualified 2020 disaster distribu-
   $3,000 ($6,000 – $3,000).
                                                                       tions)  if  you  received  a  qualified  distribution  that  you 
                                                                       recontributed, in whole or in part, before the applicable re-
Recontribution of Qualified                                            contribution period. See Form 8915-F for qualified disas-
Distributions for the Purchase or                                      ters that occur after January 25, 2021.
Construction of a Main Home
                                                                       Loans From Qualified Plans
If you received a qualified distribution to purchase or con-
struct  a  main  home  in  certain  major  disaster  areas,  you       The following special rules are available to qualified indi-
can repay all or any part of that distribution to an eligible          viduals.
retirement plan.
                                                                       • Increase to the limit for loans from employer retirement 
                                                                         plans.

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• A 1-year suspension for payments due on plan loans. 401 of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act after December 27, 2020,
Qualified individual. You are a qualified individual if both and which begins on or after January 26, 2021.
of the following apply.
If you are a qualified individual based on more than one
1. Your principal residence at any time during that disas- disaster, use the suspension period with the earliest be-
ter’s incident period is located in the qualified disaster ginning date.
area with respect to the disaster.
2. You have experienced an economic loss because of Coronavirus-Related Distributions
the disaster.
In tax year 2020, you were able to take a coronavirus-rela-
Examples of an economic loss include, but aren't limi- ted distribution from a retirement plan if that distribution
ted to: was made:
• Loss, damage to, or destruction of real or personal 1. Before December 31, 2020; and
property from fire, flooding, looting, vandalism, theft,
wind, or other cause; 2. To a qualified individual.
• Loss related to displacement from your home; or Generally, you were a qualified individual if you, your
spouse, or dependent was diagnosed with the virus
• Loss of livelihood due to temporary or permanent lay- SARS-CoV-2 or with coronavirus disease 2019
offs. (COVID-19) or if you experienced adverse financial con-
Limits on plan loans. The $50,000 limit on plan loans is sequences as a result of the coronavirus pandemic.
increased to a maximum of $100,000. Also, the additional
50% of the present value of your nonforfeitable vested ac- Repayment of Qualified
crued benefit limit is increased to 100%. Coronavirus-Related Distributions
The higher limits apply to loans made during the follow-
ing periods. The 1-year election. If you made a qualified coronavi-
rus-related distribution before December 31, 2020, you
• Loans made during the period beginning on Septem- could elect to include all that distribution in your income
ber 29, 2017 (or February 9, 2018, if in the California for 2020 and then repay any portion of it during the allowa-
wildfire disaster area), and ending on December 31, ble 3-year period. The amount repaid reduces the amount
2018. included in income for the year of the distribution.
• Loans made during the period beginning on Decem-
ber 20, 2019, and ending on June 17, 2020, for quali- The 3-year election. If you are reporting the qualified co-
fied 2018 and 2019 disasters. ronavirus-related distribution in income over a 3-year pe-
riod and, during a year in the 3-year period, you repay
• Loans made during the period beginning December more than is otherwise includible income for that year, the
27, 2020, and ending on June 24, 2021, for qualified excess may be carried forward or back to reduce the
2020 disasters. amount included in income for the year.
• Loans made during the incident period of a disaster If the repayment is made after the due date (including
beginning on or after January 26, 2021, and ending extensions) for your return for the year of distribution, you
180 days after the applicable date for that disaster. will need to file a revised Form 8915-F. See Amending
Your Return, later.
The applicable date for a qualified disaster would be
the latest of:
Other Disaster Issues
• January 26, 2021;
Amending Your Return
• The first day of the incident period with respect to the
qualified disaster; or If, after filing your original return, you make a repayment,
• The date of the declaration with respect to the quali- the repayment may reduce the amount of your qualified
fied disaster. disaster distributions that were previously included in in-
come. Depending on when a repayment is made, you may
1-year suspension of plan loan payments. Payments need to file an amended tax return to refigure your taxable
on loans that become due during the period beginning on income.
the qualified beginning date and ending on the date that is
180 days after the last day of the incident period may be If you make a repayment by the due date of your origi-
suspended for 1 year (suspension period) by the adminis- nal return (including extensions), include the repayment
trator. The qualified beginning date is: on your amended return.
• The first day of the incident period of a qualified 2018,
2019, or 2020 disaster; or
• The first day of the incident period of a qualified disas-
ter that was declared by the President under section

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If you make a repayment after the due date of your orig-
inal return (including extensions), include it on your amen-
ded return only if either of the following applies.                How To Get Tax Help

•  You elected to include all of your qualified disaster dis-      If you have questions about a tax issue; need help prepar-
   tributions in income in the year of the distributions (not      ing your tax return; or want to download free publications, 
   over 3 years) on your original return.                          forms, or instructions, go to IRS.gov to find resources that 
•  The amount of the repayment exceeds the portion of              can help you right away.
   the qualified disaster distributions that is includible in 
                                                                   Preparing and filing your tax return.  After receiving all 
   income for 2021 and you choose to carry the excess 
                                                                   your wage and earnings statements (Forms W-2, W-2G, 
   back to your 2019 or 2020 tax return.
                                                                   1099-R,  1099-MISC,  1099-NEC,  etc.);  unemployment 
Example. You received a qualified disaster distribution            compensation statements (by mail or in a digital format) or 
in the amount of $90,000 on October 16, 2019. You chose            other  government  payment  statements  (Form  1099-G); 
to spread the $90,000 over 3 years ($30,000 in income for          and  interest,  dividend,  and  retirement  statements  from 
2019,  2020,  and  2021).  On  November  19,  2021,  you           banks and investment firms (Forms 1099), you have sev-
made  a  repayment  of  $45,000.  For  2021,  none  of  the        eral options to choose from to prepare and file your tax re-
qualified  disaster  distribution  was  includible  in  income.    turn.  You  can  prepare  the  tax  return  yourself,  see  if  you 
The excess repayment of $15,000 could've been carried              qualify for free tax preparation, or hire a tax professional to 
back to 2020 or 2019, as applicable.                               prepare your return.

File Form 1040-X to amend a return you have already                Free options for tax preparation.    Your options for pre-
filed. Generally, Form 1040-X must be filed within 3 years         paring  and  filing  your  return  online  or  in  your  local  com-
after the date the original return was filed, or within 2 years    munity, if you qualify, include the following.
after the date the tax was paid, whichever is later.               • Free File. This program lets you prepare and file your 
                                                                     federal individual income tax return for free using soft-
Information for Eligible Retirement Plans                            ware or Free File Fillable Forms. However, state tax 
                                                                     preparation may not be available through Free File. Go 
A plan administrator may choose whether to treat a distri-           to IRS.gov/FreeFile to see if you qualify for free online 
bution as a qualified 2018, 2019, or 2020 disaster distribu-         federal tax preparation, e-filing, and direct deposit or 
tion, or whether to accept a rollover of a qualified disaster        payment options.
distribution  and  may  develop  reasonable  procedures  for 
                                                                   • VITA. The Volunteer Income Tax Assistance (VITA) 
determining  whether  distributions  are  qualified  disaster 
                                                                     program offers free tax help to people with 
distributions. However, the treatment of qualified disaster 
                                                                     low-to-moderate incomes, persons with disabilities, 
distributions  must  be  consistent  under  each  plan.  The 
                                                                     and limited-English-speaking taxpayers who need 
payment of a qualified disaster distribution to an individual 
                                                                     help preparing their own tax returns. Go to IRS.gov/
must  be  reported  on  Form  1099-R.  This  reporting  is  re-
                                                                     VITA, download the free IRS2Go app, or call 
quired even if the individual recontributes the qualified dis-
                                                                     800-906-9887 for information on free tax return prepa-
aster distribution to the same plan in the same year. If a 
                                                                     ration.
payer is treating the payment as a qualified disaster distri-
bution and no other appropriate code applies, the payer is         • TCE. The Tax Counseling for the Elderly (TCE) pro-
permitted  to  use  distribution  code  “2”  (early  distribution,   gram offers free tax help for all taxpayers, particularly 
exception applies) in box 7 of Form 1099-R. However, a               those who are 60 years of age and older. TCE volun-
payer  in  this  case  is  also  permitted  to  use  distribution    teers specialize in answering questions about pen-
code “1” (early distribution, no known exception) in box 7           sions and retirement-related issues unique to seniors. 
of Form 1099-R.                                                      Go to IRS.gov/TCE or download the free IRS2Go app 
                                                                     for information on free tax return preparation.
Mandatory 60-Day Postponement                                      • MilTax. Members of the U.S. Armed Forces and quali-
                                                                     fied veterans may use MilTax, a free tax service of-
Certain taxpayers affected by a federally declared disaster          fered by the Department of Defense through Military 
that occurs after December 20, 2019, may be eligible for a           OneSource. For more information, go to 
mandatory 60-day postponement for certain tax deadlines              MilitaryOneSource MilitaryOneSource.mil/MilTax (    ).
such as filing or paying income, , and employment taxes;                Also, the IRS offers Free Fillable Forms, which can 
and making contributions to a traditional IRA or Roth IRA.           be completed online and then e-filed regardless of in-
                                                                     come.
The  period  beginning  on  the  earliest  incident  date 
specified  in  the  disaster  declaration  and  ending  on  the    Using online tools to help prepare your return.       Go to 
date that is 60 days after either the earliest incident date       IRS.gov/Tools for the following.
or the date of the declaration, whichever is later, is the pe-
riod during which the deadlines are postponed. For infor-          • The Earned Income Tax Credit Assistant IRS.gov/ (
                                                                     EITCAssistant) determines if you’re eligible for the 
mation about disaster relief available in your area, includ-
                                                                     earned income credit (EIC).
ing extensions, go to IRS News Around the Nation.

44                                                                                                 Publication 575 (2023)

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• The Online EIN Application IRS.gov/EIN ( ) helps you Statement, and Form W-2c, Corrected Wage and Tax
get an employer identification number (EIN) at no Statement.
cost.
IRS social media. Go to IRS.gov/SocialMedia to see the
• The Tax Withholding Estimator IRS.gov/W4App ( ) various social media tools the IRS uses to share the latest
makes it easier for you to estimate the federal income information on tax changes, scam alerts, initiatives, prod-
tax you want your employer to withhold from your pay- ucts, and services. At the IRS, privacy and security are our
check. This is tax withholding. See how your withhold- highest priority. We use these tools to share public infor-
ing affects your refund, take-home pay, or tax due. mation with you. Don’t post your social security number
• The First-Time Homebuyer Credit Account Look-up (SSN) or other confidential information on social media
(IRS.gov/HomeBuyer) tool provides information on sites. Always protect your identity when using any social
your repayments and account balance. networking site.
The following IRS YouTube channels provide short, in-
• The Sales Tax Deduction Calculator IRS.gov/ (
formative videos on various tax-related topics in English,
SalesTax) figures the amount you can claim if you
Spanish, and ASL.
itemize deductions on Schedule A (Form 1040).
• Youtube.com/irsvideos.
Getting answers to your tax questions. On
IRS.gov, you can get up-to-date information on • Youtube.com/irsvideosmultilingua.
current events and changes in tax law. • Youtube.com/irsvideosASL.
• IRS.gov/Help: A variety of tools to help you get an-
swers to some of the most common tax questions. Watching IRS videos. The IRS Video portal
(IRSVideos.gov) contains video and audio presentations
• IRS.gov/ITA: The Interactive Tax Assistant, a tool that for individuals, small businesses, and tax professionals.
will ask you questions and, based on your input, pro-
vide answers on a number of tax topics. Online tax information in other languages. You can
• IRS.gov/Forms: Find forms, instructions, and publica- find information on IRS.gov/MyLanguage if English isn’t
tions. You will find details on the most recent tax your native language.

changes and interactive links to help you find answers Free Over-the-Phone Interpreter (OPI) Service. The
to your questions. IRS is committed to serving taxpayers with limited-English
• You may also be able to access tax information in your proficiency (LEP) by offering OPI services. The OPI Serv-
e-filing software. ice is a federally funded program and is available at Tax-
payer Assistance Centers (TACs), most IRS offices, and
every VITA/TCE tax return site. The OPI Service is acces-
Need someone to prepare your tax return? There are sible in more than 350 languages.
various types of tax return preparers, including enrolled
agents, certified public accountants (CPAs), accountants, Accessibility Helpline available for taxpayers with
and many others who don’t have professional credentials. disabilities. Taxpayers who need information about ac-
If you choose to have someone prepare your tax return, cessibility services can call 833-690-0598. The Accessi-
choose that preparer wisely. A paid tax preparer is: bility Helpline can answer questions related to current and
• Primarily responsible for the overall substantive accu- future accessibility products and services available in al-
racy of your return, ternative media formats (for example, braille, large print,
audio, etc.). The Accessibility Helpline does not have ac-
• Required to sign the return, and cess to your IRS account. For help with tax law, refunds, or
• Required to include their preparer tax identification account-related issues, go to IRS.gov/LetUsHelp.
number (PTIN).
Note. Form 9000, Alternative Media Preference, or
Although the tax preparer always signs the return, Form 9000(SP) allows you to elect to receive certain types
! you're ultimately responsible for providing all the of written correspondence in the following formats.
CAUTION information required for the preparer to accurately
prepare your return and for the accuracy of every item re- • Standard Print.
ported on the return. Anyone paid to prepare tax returns • Large Print.
for others should have a thorough understanding of tax
matters. For more information on how to choose a tax pre- • Braille.
parer, go to Tips for Choosing a Tax Preparer on IRS.gov. • Audio (MP3).
• Plain Text File (TXT).
Employers can register to use Business Services On- • Braille Ready File (BRF).
line. The Social Security Administration (SSA) offers on-
line service at SSA.gov/employer for fast, free, and secure Disasters. Go to IRS.gov/DisasterRelief to review the
W-2 filing options to CPAs, accountants, enrolled agents, available disaster tax relief.
and individuals who process Form W-2, Wage and Tax

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Getting tax forms and publications. Go to IRS.gov/ Your taxes can be affected if your SSN is used to file a
Forms to view, download, or print all the forms, instruc- fraudulent return or to claim a refund or credit.
tions, and publications you may need. Or, you can go to
• The IRS doesn’t initiate contact with taxpayers by
IRS.gov/OrderForms to place an order.
email, text messages (including shortened links), tele-
Getting tax publications and instructions in eBook phone calls, or social media channels to request or
format. Download and view most tax publications and in- verify personal or financial information. This includes
structions (including the Instructions for Form 1040) on requests for personal identification numbers (PINs),
mobile devices as eBooks at IRS.gov/eBooks. passwords, or similar information for credit cards,
IRS eBooks have been tested using Apple's iBooks for banks, or other financial accounts.
iPad. Our eBooks haven’t been tested on other dedicated • Go to IRS.gov/IdentityTheft, the IRS Identity Theft
eBook readers, and eBook functionality may not operate Central webpage, for information on identity theft and
as intended. data security protection for taxpayers, tax professio-
nals, and businesses. If your SSN has been lost or
Access your online account (individual taxpayers stolen or you suspect you’re a victim of tax-related
only). Go to IRS.gov/Account to securely access infor- identity theft, you can learn what steps you should
mation about your federal tax account. take.
• View the amount you owe and a breakdown by tax • Get an Identity Protection PIN (IP PIN). IP PINs are
year. six-digit numbers assigned to taxpayers to help pre-
• See payment plan details or apply for a new payment vent the misuse of their SSNs on fraudulent federal in-
plan. come tax returns. When you have an IP PIN, it pre-
vents someone else from filing a tax return with your
• Make a payment or view 5 years of payment history
SSN. To learn more, go to IRS.gov/IPPIN.
and any pending or scheduled payments.
• Access your tax records, including key data from your Ways to check on the status of your refund.
most recent tax return, and transcripts. • Go to IRS.gov/Refunds.
• View digital copies of select notices from the IRS. • Download the official IRS2Go app to your mobile de-
• Approve or reject authorization requests from tax pro- vice to check your refund status.
fessionals. • Call the automated refund hotline at 800-829-1954.
• View your address on file or manage your communica- The IRS can’t issue refunds before mid-February
tion preferences. ! for returns that claimed the EIC or the additional
CAUTION child tax credit (ACTC). This applies to the entire
Get a transcript of your return. With an online account,
refund, not just the portion associated with these credits.
you can access a variety of information to help you during
the filing season. You can get a transcript, review your
most recently filed tax return, and get your adjusted gross Making a tax payment. Payments of U.S. tax must be
income. Create or access your online account at IRS.gov/ remitted to the IRS in U.S. dollars. Digital assets are not
Account. accepted. Go to IRS.gov/Payments for information on how
to make a payment using any of the following options.
Tax Pro Account. This tool lets your tax professional • IRS Direct Pay: Pay your individual tax bill or estimated
submit an authorization request to access your individual tax payment directly from your checking or savings ac-
taxpayer IRS online account. For more information, go to count at no cost to you.
IRS.gov/TaxProAccount.
• Debit Card, Credit Card, or Digital Wallet: Choose an
Using direct deposit. The safest and easiest way to re- approved payment processor to pay online or by
ceive a tax refund is to e-file and choose direct deposit, phone.
which securely and electronically transfers your refund di- Electronic Funds Withdrawal: Schedule a payment
•
rectly into your financial account. Direct deposit also when filing your federal taxes using tax return prepara-
avoids the possibility that your check could be lost, stolen, tion software or through a tax professional.
destroyed, or returned undeliverable to the IRS. Eight in
10 taxpayers use direct deposit to receive their refunds. If • Electronic Federal Tax Payment System: Best option
you don’t have a bank account, go to IRS.gov/ for businesses. Enrollment is required.
DirectDeposit for more information on where to find a bank • Check or Money Order: Mail your payment to the ad-
or credit union that can open an account online. dress listed on the notice or instructions.
Reporting and resolving your tax-related identity • Cash: You may be able to pay your taxes with cash at
theft issues. a participating retail store.
• Tax-related identity theft happens when someone • Same-Day Wire: You may be able to do same-day
steals your personal information to commit tax fraud. wire from your financial institution. Contact your finan-
cial institution for availability, cost, and time frames.

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Note. The IRS uses the latest encryption technology to under the Stay Connected tab, choose the Contact Us op-
ensure that the electronic payments you make online, by tion and click on “Local Offices.”
phone, or from a mobile device using the IRS2Go app are
safe and secure. Paying electronically is quick, easy, and The Taxpayer Advocate Service (TAS)
faster than mailing in a check or money order.
Is Here To Help You
What if I can’t pay now? Go to IRS.gov/Payments for
What Is TAS?
more information about your options.
• Apply for an online payment agreement IRS.gov/ ( TAS is an independent organization within the IRS that
OPA) to meet your tax obligation in monthly install- helps taxpayers and protects taxpayer rights. TAS strives
ments if you can’t pay your taxes in full today. Once to ensure that every taxpayer is treated fairly and that you
you complete the online process, you will receive im- know and understand your rights under the Taxpayer Bill
mediate notification of whether your agreement has of Rights.
been approved.
• Use the Offer in Compromise Pre-Qualifier to see if How Can You Learn About Your Taxpayer
you can settle your tax debt for less than the full Rights?
amount you owe. For more information on the Offer in
The Taxpayer Bill of Rights describes 10 basic rights that
Compromise program, go to IRS.gov/OIC.
all taxpayers have when dealing with the IRS. Go to
Filing an amended return. Go to IRS.gov/Form1040X TaxpayerAdvocate.IRS.gov to help you understand what
for information and updates. these rights mean to you and how they apply. These are
your rights. Know them. Use them.
Checking the status of your amended return. Go to
IRS.gov/WMAR to track the status of Form 1040-X amen- What Can TAS Do for You?
ded returns.
TAS can help you resolve problems that you can’t resolve
It can take up to 3 weeks from the date you filed
with the IRS. And their service is free. If you qualify for
! your amended return for it to show up in our sys- their assistance, you will be assigned to one advocate
CAUTION tem, and processing it can take up to 16 weeks.
who will work with you throughout the process and will do
everything possible to resolve your issue. TAS can help
Understanding an IRS notice or letter you’ve re- you if:
ceived. Go to IRS.gov/Notices to find additional informa-
tion about responding to an IRS notice or letter. • Your problem is causing financial difficulty for you,
your family, or your business;
Responding to an IRS notice or letter. You can now • You face (or your business is facing) an immediate
upload responses to all notices and letters using the threat of adverse action; or
Document Upload Tool. For notices that require additional
action, taxpayers will be redirected appropriately on • You’ve tried repeatedly to contact the IRS but no one
IRS.gov to take further action. To learn more about the has responded, or the IRS hasn’t responded by the
tool, go to IRS.gov/Upload. date promised.

Note. You can use Schedule LEP (Form 1040), Re- How Can You Reach TAS?
quest for Change in Language Preference, to state a pref-
erence to receive notices, letters, or other written commu- TAS has offices in every state, the District of Columbia,
nications from the IRS in an alternative language. You may and Puerto Rico. To find your advocate’s number:
not immediately receive written communications in the re- Go to TaxpayerAdvocate.IRS.gov/Contact-Us;
•
quested language. The IRS’s commitment to LEP taxpay-
ers is part of a multi-year timeline that began providing • Download Pub. 1546, The Taxpayer Advocate Service
translations in 2023. You will continue to receive communi- Is Your Voice at the IRS, available at IRS.gov/pub/irs-
cations, including notices and letters, in English until they pdf/p1546.pdf;
are translated to your preferred language. • Call the IRS toll free at 800-TAX-FORM
(800-829-3676) to order a copy of Pub. 1546;
Contacting your local TAC. Keep in mind, many ques-
tions can be answered on IRS.gov without visiting a TAC. • Check your local directory; or
Go to IRS.gov/LetUsHelp for the topics people ask about Call TAS toll free at 877-777-4778.
•
most. If you still need help, TACs provide tax help when a
tax issue can’t be handled online or by phone. All TACs
How Else Does TAS Help Taxpayers?
now provide service by appointment, so you’ll know in ad-
vance that you can get the service you need without long TAS works to resolve large-scale problems that affect
wait times. Before you visit, go to IRS.gov/TACLocator to many taxpayers. If you know of one of these broad issues,
find the nearest TAC and to check hours, available serv- report it to TAS at IRS.gov/SAMS. Be sure to not include
ices, and appointment options. Or, on the IRS2Go app, any personal taxpayer information.

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Low Income Taxpayer Clinics (LITCs)                              responsibilities  in  different  languages  for  individuals  who 
                                                                 speak English as a second language. Services are offered 
LITCs are independent from the IRS and TAS. LITCs rep-           for free or a small fee. For more information or to find an 
resent individuals whose income is below a certain level         LITC near you, go to               the   LITC           page at 
and who need to resolve tax problems with the IRS. LITCs         TaxpayerAdvocate.IRS.gov/LITC  or  see  IRS  Pub.  4134, 
can represent taxpayers in audits, appeals, and tax collec-      Low  Income  Taxpayer  Clinic  List,  at IRS.gov/pub/irs-pdf/
tion  disputes  before  the  IRS  and  in  court.  In  addition, p4134.pdf.
LITCs can provide information about taxpayer rights and 

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Worksheet A. Simplified Method                                                   Keep for Your Records

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 (contract) at the annuity starting date plus any death benefit exclusion.* 
    See Cost (Investment in the Contract) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       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, 1040-SR, or 1040-NR, line 5b. 
    Note: If your Form 1099-R shows a larger taxable amount, use the amount figured on this line 
    instead. If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety 
    Officers before entering an amount on your tax return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                 9.
10. Was your annuity starting date before 1987?
     Yes. STOP. Don’t complete the rest of this worksheet.
     No. Add lines 6 and 8. This is the amount you have recovered tax free through 2023. 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 won’t have to complete 
    this worksheet next year. The payments you receive next year will generally be fully taxable . . . . . . .                                                        11.
* A death benefit exclusion (up to $5,000) applied to certain benefits received by employees who died before August 21, 1996.

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

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Recapture Allocation Chart                                                              Keep for Your Records

Tax Year      Taxable                                                 Nontaxable (Basis)
   2010       Form 8606, line 23 . . . . . . . .                      Form 8606, line 22 . . . . . . . . . . .               
   2011       Form 1040, line 16b;* Form                              Form 1040, line 16a;** Form 
              1040A, line 12b;* or Form                               1040A, line 12a;** or Form 
              1040NR, line 17b* . . . . . . . . .                     1040NR, line 17a** . . . . . . . . . . .               
   2012       Form 1040, line 16b;* Form                              Form 1040, line 16a;** Form 
              1040A, line 12b;* or Form                               1040A, line 12a;** or Form 
              1040NR, line 17b* . . . . . . . . .                     1040NR, line 17a** . . . . . . . . . . .               
   2013       Form 1040, line 16b;* Form                              Form 1040, line 16a;** Form 
              1040A, line 12b;* or Form                               1040A, line 12a;** or Form 
              1040NR, line 17b* . . . . . . . . .                     1040NR, line 17a** . . . . . . . . . . .               
   2014       Form 1040, line 16b;* Form                              Form 1040, line 16a;** Form 
              1040A, line 12b;* or Form                               1040A, line 12a;** or Form 
              1040NR, line 17b* . . . . . . . . .                     1040NR, line 17a** . . . . . . . . . . .               
   2015       Form 1040, line 16b;* Form                              Form 1040, line 16a;** Form 
              1040A, line 12b;* or Form                               1040A, line 12a;** or Form 
              1040NR, line 17b* . . . . . . . . .                     1040NR, line 17a** . . . . . . . . . . .               
   2016       Form 1040, line 16b;* Form                              Form 1040, line 16a;** Form 
              1040A, line 12b;* or Form                               1040A, line 12a;** or Form 
              1040NR, line 17b* . . . . . . . . .                     1040NR, line 17a** . . . . . . . . . . .               
   2017       Form 1040, line 16b;* Form                              Form 1040, line 16a;** Form 
              1040A, line 12b;* or Form                               1040A, line 12a;** or Form 
              1040NR, line 17b* . . . . . . . . .                     1040NR, line 17a** . . . . . . . . . . .               
   2018       Form 1040, line 4b;* or 
              Form 1040NR,                                            Form 1040, line 4a;** or Form 
              line 17b* . . . . . . . . . . . . . . . . .             1040NR, line 17a** . . . . . . . . . . .               
   2019       Form 1040, line 4d;* or 
              Form 1040-NR,                                           Form 1040, line 4c;** or Form 
              line 17b* . . . . . . . . . . . . . . . . .             1040-NR, line 17a** . . . . . . . . . .                
   2020       Form 1040, 1040-SR, or                                  Form 1040, 1040-SR, or 
              1040-NR, line 5b* . . . . . . . . .                     1040-NR, line 5a** . . . . . . . . . . .               
   2021       Form 1040, 1040-SR, or                                  Form 1040, 1040-SR, or 
              1040-NR, line 5b* . . . . . . . . .                     1040-NR, line 5a** . . . . . . . . . . .               
   2022       Form 1040, 1040-SR, or                                  Form 1040, 1040-SR, or 
              1040-NR, line 5b* . . . . . . . . .                     1040-NR, line 5a** . . . . . . . . . . .               
   2023       Form 1040, 1040-SR, or                                  Form 1040, 1040-SR, or 
              1040-NR, line 5b* . . . . . . . . .                     1040-NR, line 5a** . . . . . . . . . . .               
              Total . . . . . . . . . . . . . . . . . . . . .         Total . . . . . . . . . . . . . . . . . . . . . . . .  
Note. The sum of the totals for each column should equal the amount reported in box 10 of your 2023 Form 1099-R.
* Only include those amounts attributable to an in-plan Roth rollover.
** Only include any contributions (usually box 5 of Form 1099-R) that were taxable to you when made and attributable to an in-plan 
Roth rollover.

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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.
 
                                            Rollovers 31                            Form 5329:
10% tax for early withdrawal    29        Disability pensions   4 6,                 Recapture tax 37
403(b) plans:                             Disabled  34                               Special additional taxes (penalty 
  Defined 4                               Disaster-related relief  39                taxes)    33 34, 
  Loans from, without tax                 Distributions 27                          Form RRB-1099-R    7
  consequences       18                   (See also Rollovers)                      Form W-4P:
  Simplified Method to be used     13       Beginning date for  37                   Withholding from retirement plan 
5% owners   37                              Early distributions and penalty tax 29,  payments    9 10, 
                                              33                                    Form W-4V:
A                                           Employer securities   16                 Voluntary withholding request for social 
Alimony (See Qualified domestic relations   Loans treated as  18                     security or railroad retirement 
  orders (QDROs))                           Lump-sum   16 20 26, -                   benefits    10
Amending your return     43                 Minimum required    37                  Frozen deposits 29
Annuities                                   Nonperiodic, taxation of 14             Fully taxable payments   12
  5% rate on early distributions   33       Periodic, taxation of 11
  Defined 4                                 Qualified public safety employees   35  G
  Fixed-period  4 13,                       Qualified reservist 36                  General Rule 12 14, 
  Guaranteed payments      39               U.S. savings bonds    18                 Death of retiree under 39
  Joint and survivor annuities  4         Dividends  14                              Investment in the contract, 
  Minimum distributions from    38                                                   determination of   10
  Payments under    5                     E                                         Guaranteed payments    13
  Qualified plan annuity starting before  Early withdrawal from deferred interest 
  November 19, 1996        12               account:                                H
  Rollovers 30                              Penalty tax on 29 33,                   Home purchase:
  Single-life 4 13,                       Eligible retirement plan   44              Loans from qualified plans for       18
  Starting date of  11 13 16, ,           Employer securities, distributions 
  Before November 19, 1996         14       of 16                                   I
  Distribution on or after   16           Estate tax 23                             In-plan Roth rollovers 31
  Transfers of contracts  19                Deduction  38                           Individual retirement accounts:
  Types of 4                              Estimated tax 10                           Minimum distributions from  38
  Variable annuities  4 5,                Excess accumulation, tax on    37          Rollovers 28
Assistance (See Tax help)                 Excess plan contributions, corrective     Interest deduction:
                                            distributions of  14
                                                                                     Denial on loan from plan 19
B
Beneficiaries 38                          F
                                                                                    J
                                          Figuring taxable amount    16 18-
                                                                                    Joint and survivor annuities         4
C                                         Fixed-period annuities   4 13, 
Capital gains:                            Foreign employment contributions      11  L
  Lump-sum distributions     22           Form:
Cash withdrawals (See Nonperiodic           4972 21                                 Loans treated as distributions        18
  payments)                                 W-4P  9                                 Local government employees:
Certain firefighters:                     Form 1040:                                 Section 457 plans  5
  Distributions to  36                      Rollovers 31                            Losses:
Child support (See Qualified domestic     Form 1040-X:                               Lump-sum distribution   22
  relations orders (QDROs))                 Changing your mind on lump-sum          Lump-sum distributions   16 20 26,    -
Coronavirus-Related Distributions     43      treatment 22                           10-year tax option 23
Corrective distributions of excess plan   Form 1099-INT:                             Capital gain treatment  22
  contributions    14                       U.S. savings bonds distributions  18     Defined 20
Costs:                                    Form 1099-R:                               Election of 22
  Investment in the contract    10          10-year tax option for lump-sum          Form 4972   21
  Lump-sum distribution, determination        distribution 23
  for   22                                  Corrected form 2                        M
                                            Corrective distributions of excess plan Mandatory 60-day postponement           44
D                                             contributions 16                      Military and government disability 
Death benefits  5                           Exceptions to tax 34                     pensions:
Death of employee    37 39,                 Investment in the contract 11            Service-connected disability        6
Death of retiree 39                         Loan treated as distribution from       Minimum required distributions         37
Deductible voluntary employee                 plan  19                              Missing children, photographs of        2
  contributions    12                       Rollovers 31                            Multiple annuitants 14
Defined contribution plans      17          Tax-free exchanges    20                Multiple-lives annuities 13
Designated Roth accounts:                 Form 4972:
  Costs 11                                  10-year tax option for lump-sum         N
  Defined 4                                   distribution 23
  Qualified distributions  11               Lump-sum distributions   21 22,         Net Investment Income Tax    5 18, 
                                                                                    Net unrealized appreciation (NUA)        22

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  Deferring tax on 16                         Rollovers 28                               Not allowed  13
Nonperiodic payments:                       Qualified public safety employees:           Single-sum in connection with start of 
  Loan treated as  18                         Distributions to 35 36,                    payments     17
  Taxation of 14                            Qualified settlement income:                Single-life annuities 4 13, 
Nonqualified plans:                           Exxon Valdez litigation settlement   32   Social security, tax on 10
  Distribution before annuity start date 17                                             State employees:
  General Rule to be used  14               R                                            Section 457 plans  5
  Loans treated as distributions from  19   Railroad retirement benefits   6 9-         State insurer delinquency 
                                                                                         proceedings     37
Nonresident aliens:                           Taxability of 10
                                                                                        Surviving spouse:
  Railroad retirement 7                     Recapture tax:
                                                                                         Distribution rules for 38
                                              Changes in distribution method    36
                                                                                         Rollovers by 30
P                                           Recontribution of Qualified 
Partial rollovers 29                          Distributions:
Partly taxable payments    12                 Purchase or Construction of a Main        T
Penalty taxes:                                Home      42                              Tables:
  Early distributions 33                    Reemployment     21                          Comparison of direct payment vs. direct 
  Excess accumulation    37                 Related employers and related                rollover (Table 1)     32
Pensions:                                     plans 19                                  Tax help 44
  Defined 4                                 Repayment of loan within 5 years       18   Tax-free exchanges  19
  Disability pensions 4 6,                  Required beginning date    37               Ten percent tax for early withdrawal  33
  Types of 4                                Required distributions, minimum        37   Ten-year tax option 23
Periodic payments:                          Retirement bonds   30                       Terminally ill individuals:
  Taxation of 11                            Rollovers 28 32-                             Distributions to 34
  Withholding tax  10                         20% tax rate on distribution 10           Time for making rollover   29
Plan loan offset  29                          Comparison of direct payment vs. direct   Transfers of annuity contracts   19
                                              rollover (Table 1) 32
Public safety officers insurance              Direct rollover to another qualified      U
  premiums    6                               plan    10 29, 
                                                                                        U.S. savings bonds:
Public school employees:                      In-plan Roth  31
                                                                                         Distribution of 18
  Tax-sheltered annuity plans for             Nonspouse beneficiary   30
   (See 403(b) plans)
Publications (See Tax help)                   Nontaxable amounts  28
                                                                                        V
                                              Notice to recipients of eligible rollover 
                                              distribution    31                        Variable annuities 4 5, 
Q                                             Property and cash distributed  30         Voluntary employee contributions      12
Qualified disaster distributions  40          Roth IRAs 32
Qualified domestic relations orders           Substitution of other property 30         W
  (QDROs)   4 30,                             Surviving spouse making    30             Withdrawals 5
  Alternate payee under and lump-sum 
                                                                                         Employees withdrawing 
   distribution   21                        S                                            contributions    17
Qualified employee annuities:
  Defined 4                                 Section 457 deferred compensation           Withholding 9
  Simplified Method to be used  13            plans 5                                    10% rate used    10
Qualified employee plans:                   Securities of employer, distributions        20% of eligible rollover 28 29 31, , 
                                              of 16                                      Periodic payments    10
  Defined 4                                 Self-employed persons' rollovers       28    Railroad retirement  7
  Simplified Method to be used  13          Separation from service    35               Worksheets:
Qualified plans 14                          Service-connected disability   6             Simplified Method  13
(See also specific type of plan)
  Distribution before annuity starting      Simplified Method   12 13,                   Worksheet A, illustrated  15
   date   17                                  Death of retiree under  39                 Worksheet A, Simplified Method    49
  General Rule  14                            How to use    13
  Loans from, without tax                     Investment in the contract, 
   consequences       18                      determination of   10

52                                                                                                    Publication 575 (2023)

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