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H&r Block Free For Military

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H&r Block Free For Military

H&r block free for military Publication 721 - Main Content Table of Contents Part I General InformationRefund of Contributions Tax Withholding and Estimated Tax Filing Requirements Part II Rules for RetireesAnnuity starting date. H&r block free for military Gross monthly rate. H&r block free for military Your cost. H&r block free for military Choosing a survivor annuity after retirement. H&r block free for military Canceling a survivor annuity after retirement. H&r block free for military Annuity starting date after 1986. H&r block free for military Annuity starting date before 1987. H&r block free for military Simplified Method General Rule Three-Year Rule Alternative Annuity Option Federal Gift Tax Retirement During the Past Year Reemployment After Retirement Nonresident Aliens Thrift Savings Plan Rollover Rules Distributions Used To Pay Insurance Premiums for Public Safety Officers How To Report Benefits Part III Rules for Disability Retirement and Credit for the Elderly or the DisabledDisability Annuity Other Benefits Credit for the Elderly or the Disabled Part IV Rules for Survivors of Federal EmployeesFERS Death Benefit CSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Thrift Savings Plan Federal Estate Tax Part V Rules for Survivors of Federal RetireesCSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Voluntary Contributions Thrift Savings Plan Federal Estate Tax Income Tax Deduction for Estate Tax Paid How To Get Tax HelpLow Income Taxpayer Clinics Part I General Information This part of the publication contains information that can apply to most recipients of civil service retirement benefits. H&r block free for military Refund of Contributions If you leave federal government service or transfer to a job not under the CSRS or FERS and you are not eligible for an immediate annuity, you can choose to receive a refund of the money in your CSRS or FERS retirement account. H&r block free for military The refund will include both regular and voluntary contributions you made to the fund, plus any interest payable. H&r block free for military If the refund includes only your contributions, none of the refund is taxable. H&r block free for military If it includes any interest, the interest is taxable unless you roll it over directly into another qualified plan or a traditional individual retirement arrangement (IRA). H&r block free for military If you do not have the Office of Personnel Management (OPM) transfer the interest to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. H&r block free for military See Rollover Rules in Part II for information on how to make a rollover. H&r block free for military Interest is not paid on contributions to the CSRS for service after 1956 unless your service was for more than 1 year but not more than 5 years. H&r block free for military Therefore, many employees who withdraw their contributions under the CSRS do not get interest and do not owe any tax on their refund. H&r block free for military If you do not roll over interest included in your refund, it may qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. H&r block free for military If you separate from service before the calendar year in which you reach age 55, it may be subject to an additional 10% tax on early distributions. H&r block free for military For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. H&r block free for military A lump-sum distribution is eligible for capital gain treatment or the 10-year tax option only if the plan participant was born before January 2, 1936. H&r block free for military Tax Withholding and Estimated Tax The CSRS or FERS annuity you receive is subject to federal income tax withholding, unless you choose not to have tax withheld. H&r block free for military OPM will tell you how to make the choice. H&r block free for military The choice for no withholding remains in effect until you change it. H&r block free for military These withholding rules also apply to a disability annuity, whether received before or after minimum retirement age. H&r block free for military If you choose not to have tax withheld, or if you do not have enough tax withheld, you may have to make estimated tax payments. H&r block free for military You may owe a penalty if the total of your withheld tax and estimated tax does not cover most of the tax shown on your return. H&r block free for military Generally, you will owe the penalty for 2014 if the additional tax you must pay with your return is $1,000 or more and more than 10% of the tax to be shown on your 2014 return. H&r block free for military For more information, including exceptions to the penalty, see chapter 4 of Publication 505, Tax Withholding and Estimated Tax. H&r block free for military Form CSA 1099R. H&r block free for military   Form CSA 1099R is mailed to you by OPM each year. H&r block free for military It will show any tax you had withheld. H&r block free for military File a copy of Form CSA 1099R with your tax return if any federal income tax was withheld. H&r block free for military    You also can view and download your Form CSA 1099R by visiting the OPM website at  www. H&r block free for military servicesonline. H&r block free for military opm. H&r block free for military gov. H&r block free for military To log in, you will need your retirement CSA claim number and your personal identification number. H&r block free for military Choosing no withholding on payments outside the United States. H&r block free for military   The choice for no withholding generally cannot be made for annuity payments to be delivered outside the United States and its possessions. H&r block free for military   To choose no withholding if you are a U. H&r block free for military S. H&r block free for military citizen or resident alien, you must provide OPM with your home address in the United States or its possessions. H&r block free for military Otherwise, OPM has to withhold tax. H&r block free for military For example, OPM must withhold if you provide a U. H&r block free for military S. H&r block free for military address for a nominee, trustee, or agent (such as a bank) to whom the benefits are to be delivered, but you do not provide your own U. H&r block free for military S. H&r block free for military home address. H&r block free for military   If you do not provide a home address in the United States or its possessions, you can choose not to have tax withheld only if you certify to OPM that you are not a U. H&r block free for military S. H&r block free for military citizen, a U. H&r block free for military S. H&r block free for military resident alien, or someone who left the United States to avoid tax. H&r block free for military But if you so certify, you may be subject to the 30% flat rate withholding that applies to nonresident aliens. H&r block free for military For details, see Publication 519, U. H&r block free for military S. H&r block free for military Tax Guide for Aliens. H&r block free for military Withholding certificate. H&r block free for military   If you give OPM a Form W-4P-A, Election of Federal Income Tax Withholding, you can choose not to have tax withheld or you can choose to have tax withheld. H&r block free for military The amount of tax withheld depends on your marital status, the number of withholding allowances, and any additional amount you designate to be withheld. H&r block free for military If you do not make either of these choices, OPM must withhold as if you were married with three withholding allowances. H&r block free for military To change the amount of tax withholding or to stop withholding, call OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. H&r block free for military C. H&r block free for military calling area must call 202-606-0500). H&r block free for military No special form is needed. H&r block free for military You will need your retirement CSA or CSF claim number, your social security number, and your personal identification number (PIN) when you call. H&r block free for military If you have TTY/TDD equipment, call 1-855–887–4957. H&r block free for military If you need a PIN, call OPM's Retirement Information Office. H&r block free for military You also can change the amount of withholding or stop withholding online by visiting the OPM website at www. H&r block free for military servicesonline. H&r block free for military opm. H&r block free for military gov. H&r block free for military You will need your retirement CSA or CSF claim number and your PIN. H&r block free for military Withholding from certain lump-sum payments. H&r block free for military   If you leave the federal government before becoming eligible to retire and you apply for a refund of your CSRS or FERS contributions, or you die without leaving a survivor eligible for an annuity, you or your beneficiary will receive a distribution of your contributions to the retirement plan plus any interest payable. H&r block free for military Tax will be withheld at a 20% rate on the interest distributed. H&r block free for military However, tax will not be withheld if you have OPM transfer (roll over) the interest directly to your traditional IRA or other qualified plan. H&r block free for military If you have OPM transfer (roll over) the interest directly to a Roth IRA, the entire amount will be taxed in the current year. H&r block free for military Because no income tax will be withheld at the time of the transfer, you may want to increase your withholding or pay estimated taxes. H&r block free for military See Rollover Rules in Part II. H&r block free for military If you receive only your contributions, no tax will be withheld. H&r block free for military Withholding from Thrift Savings Plan payments. H&r block free for military   Generally, a distribution that you receive from the TSP is subject to federal income tax withholding. H&r block free for military The amount withheld is: 20% if the distribution is an eligible rollover distribution, 10% if it is a nonperiodic distribution other than an eligible rollover distribution, or An amount determined as if you were married with three withholding allowances, unless you submit a withholding certificate (Form W-4P), if it is a periodic distribution. H&r block free for military  However, you usually can choose not to have tax withheld from TSP payments other than eligible rollover distributions. H&r block free for military By January 31 after the end of the year in which you receive a distribution, the TSP will issue Form 1099-R showing the total distributions you received in the prior year and the amount of tax withheld. H&r block free for military   For a detailed discussion of withholding on distributions from the TSP, see Important Tax Information About Payments From Your TSP Account, available from your agency personnel office or from the TSP. H&r block free for military The above document is also available in the “Forms & Publications” section of the TSP website at www. H&r block free for military tsp. H&r block free for military gov. H&r block free for military Estimated tax. H&r block free for military   Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax for 2014 (after subtracting your withholding and credits) and you expect your withholding and your credits to be less than the smaller of: 90% of the tax to be shown on your income tax return for 2014, or 100% of the tax shown on your 2013 income tax return (110% of that amount if the adjusted gross income shown on the return was more than $150,000 ($75,000 if your filing status for 2014 will be married filing separately)). H&r block free for military The return must cover all 12 months. H&r block free for military   You do not have to pay estimated tax for 2014 if you were a U. H&r block free for military S. H&r block free for military citizen or resident alien for all of 2013 and you had no tax liability for the full 12-month 2013 tax year. H&r block free for military   Publication 505 contains information that you can use to help you figure your estimated tax payments. H&r block free for military Filing Requirements If your gross income, including the taxable part of your annuity, is less than a certain amount, you generally do not have to file a federal income tax return for that year. H&r block free for military The gross income filing requirements for the tax year are in the instructions to Form 1040, 1040A, or 1040EZ. H&r block free for military Children. H&r block free for military   If you are the surviving spouse of a federal employee or retiree and your monthly annuity check includes a survivor annuity for one or more children, each child's annuity counts as his or her own income (not yours) for federal income tax purposes. H&r block free for military   If your child can be claimed as a dependent, treat the taxable part of his or her annuity as unearned income when applying the filing requirements for dependents. H&r block free for military Form CSF 1099R. H&r block free for military   Form CSF 1099R will be mailed to you by January 31 after the end of each tax year. H&r block free for military It will show the total amount of the annuity you received in the past year. H&r block free for military It also should show, separately, the survivor annuity for a child or children. H&r block free for military Only the part that is each individual's survivor annuity should be shown on that individual's Form 1040 or 1040A. H&r block free for military   If your Form CSF 1099R does not show separately the amount paid to you for a child or children, attach a statement to your return, along with a copy of Form CSF 1099R, explaining why the amount shown on the tax return differs from the amount shown on Form CSF 1099R. H&r block free for military    You also can view and download your Form CSF 1099R by visiting the OPM website at  www. H&r block free for military servicesonline. H&r block free for military opm. H&r block free for military gov. H&r block free for military To log in you will need your retirement CSF claim number and personal identification number. H&r block free for military    You may request a Summary of Payments, showing the amounts paid to you for your child(ren), from OPM by calling OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. H&r block free for military C. H&r block free for military calling area must call 202-606-0500). H&r block free for military You will need your CSF claim number and your social security number when you call. H&r block free for military Taxable part of annuity. H&r block free for military   To find the taxable part of a retiree's annuity when applying the filing requirements, see the discussion in Part II, Rules for Retirees , or Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled , whichever applies. H&r block free for military To find the taxable part of each survivor annuity when applying the filing requirements, see the discussion in Part IV, Rules for Survivors of Federal Employees , or Part V, Rules for Survivors of Federal Retirees , whichever applies. H&r block free for military Part II Rules for Retirees This part of the publication is for retirees who retired on nondisability retirement. H&r block free for military If you retired on disability before you reached your minimum retirement age, see Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled. H&r block free for military However, on the day after you reach your minimum retirement age, use the rules in this section to report your disability retirement and begin recovering your cost. H&r block free for military Annuity statement. H&r block free for military   The statement you received from OPM when your CSRS or FERS annuity was approved shows the commencing date (the annuity starting date), the gross monthly rate of your annuity benefit, and your total contributions to the retirement plan (your cost). H&r block free for military You will use this information to figure the tax-free recovery of your cost. H&r block free for military Annuity starting date. H&r block free for military   If you retire from federal government service on a regular annuity, your annuity starting date is the commencing date on your annuity statement from OPM. H&r block free for military If something delays payment of your annuity, such as a late application for retirement, it does not affect the date your annuity begins to accrue or your annuity starting date. H&r block free for military Gross monthly rate. H&r block free for military   This is the amount you were to get after any adjustment for electing a survivor's annuity or for electing the lump-sum payment under the alternative annuity option (if either applied) but before any deduction for income tax withholding, insurance premiums, etc. H&r block free for military Your cost. H&r block free for military   Your monthly annuity payment contains an amount on which you have previously paid income tax. H&r block free for military This amount represents part of your contributions to the retirement plan. H&r block free for military Even though you did not receive the money that was contributed to the plan, it was included in your gross income for federal income tax purposes in the years it was taken out of your pay. H&r block free for military   The cost of your annuity is the total of your contributions to the retirement plan, as shown on your annuity statement from OPM. H&r block free for military If you elected the alternative annuity option, it includes any deemed deposits and any deemed redeposits that were added to your lump-sum credit. H&r block free for military (See Lump-sum credit under Alternative Annuity Option, later. H&r block free for military )   If you repaid contributions that you had withdrawn from the retirement plan earlier, or if you paid into the plan to receive full credit for service not subject to retirement deductions, the entire repayment, including any interest, is a part of your cost. H&r block free for military You cannot claim an interest deduction for any interest payments. H&r block free for military You cannot treat these payments as voluntary contributions; they are considered regular employee contributions. H&r block free for military Recovering your cost tax free. H&r block free for military   How you figure the tax-free recovery of the cost of your CSRS or FERS annuity depends on your annuity starting date. H&r block free for military If your annuity starting date is before July 2, 1986, either the Three-Year Rule or the General Rule (both discussed later) applies to your annuity. H&r block free for military If your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method (discussed later). H&r block free for military If your annuity starting date is after November 18, 1996, you must use the Simplified Method. H&r block free for military   Under both the General Rule and the Simplified Method, each of your monthly annuity payments is made up of two parts: the tax-free part that is a return of your cost, and the taxable part that is the amount of each payment that is more than the part that represents your cost (unless such payment is used for purposes discussed under Distributions Used To Pay Insurance Premiums for Public Safety Officers , later). H&r block free for military The tax-free part is a fixed dollar amount. H&r block free for military It remains the same, even if your annuity is increased. H&r block free for military Generally, this rule applies as long as you receive your annuity. H&r block free for military However, see Exclusion limit , later. H&r block free for military Choosing a survivor annuity after retirement. H&r block free for military    If you retired without a survivor annuity and report your annuity under the Simplified Method, do not change your tax-free monthly amount even if you later choose a survivor annuity. H&r block free for military   If you retired without a survivor annuity and report your annuity under the General Rule, you must figure the tax-free part of your annuity using a new exclusion percentage if you later choose a survivor annuity and take reduced annuity payments. H&r block free for military To figure the new exclusion percentage, reduce your cost by the amount you previously recovered tax free. H&r block free for military Figure the expected return as of the date the reduced annuity begins. H&r block free for military For details on the General Rule, see Publication 939. H&r block free for military Canceling a survivor annuity after retirement. H&r block free for military   If you retired with a survivor annuity payable to your spouse upon your death and you notify OPM that your marriage has ended, your annuity might be increased to remove the reduction for a survivor benefit. H&r block free for military The increased annuity does not change the cost recovery you figured at the annuity starting date. H&r block free for military The tax-free part of each annuity payment remains the same. H&r block free for military    For more information about choosing or canceling a survivor annuity after retirement, contact OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. H&r block free for military C. H&r block free for military calling area must call 202-606-0500). H&r block free for military Exclusion limit. H&r block free for military   Your annuity starting date determines the total amount of annuity payments that you can exclude from income over the years. H&r block free for military Annuity starting date after 1986. H&r block free for military   If your annuity starting date is after 1986, the total amount of annuity income that you (or the survivor annuitant) can exclude over the years as a return of your cost cannot exceed your total cost. H&r block free for military Annuity payments you or your survivors receive after the total cost in the plan has been recovered are generally fully taxable. H&r block free for military Example. H&r block free for military Your annuity starting date is after 1986 and you exclude $100 a month under the Simplified Method. H&r block free for military If your cost is $12,000, the exclusion ends after 10 years (120 months). H&r block free for military Thereafter, your entire annuity is generally fully taxable. H&r block free for military Annuity starting date before 1987. H&r block free for military   If your annuity starting date is before 1987, you can continue to take your monthly exclusion figured under the General Rule or Simplified Method for as long as you receive your annuity. H&r block free for military If you chose a joint and survivor annuity, your survivor can continue to take that same exclusion. H&r block free for military The total exclusion may be more than your cost. H&r block free for military Deduction of unrecovered cost. H&r block free for military   If your annuity starting date is after July 1, 1986, and the cost of your annuity has not been fully recovered at your (or the survivor annuitant's) death, a deduction is allowed for the unrecovered cost. H&r block free for military The deduction is claimed on your (or your survivor's) final tax return as a miscellaneous itemized deduction (not subject to the 2%-of-adjusted-gross-income limit). H&r block free for military If your annuity starting date is before July 2, 1986, no tax benefit is allowed for any unrecovered cost at death. H&r block free for military Simplified Method If your annuity starting date is after November 18, 1996, you must use the Simplified Method to figure the tax-free part of your CSRS or FERS annuity. H&r block free for military (OPM has figured the taxable amount of your annuity shown on your Form CSA 1099R using the Simplified Method. H&r block free for military ) You could have chosen to use either the Simplified Method or the General Rule if your annuity starting date is after July 1, 1986, but before November 19, 1996. H&r block free for military The Simplified Method does not apply if your annuity starting date is before July 2, 1986. H&r block free for military Under the Simplified Method, you figure the tax-free part of each full monthly payment by dividing your cost by a number of months based on your age. H&r block free for military This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. H&r block free for military If your annuity starting date is after 1997 and your annuity includes a survivor benefit for your spouse, this number is based on your combined ages. H&r block free for military Worksheet A. H&r block free for military   Use Worksheet A. H&r block free for military Simplified Method (near the end of this publication), to figure your taxable annuity. H&r block free for military Be sure to keep the completed worksheet. H&r block free for military It will help you figure your taxable amounts for later years. H&r block free for military Instead of Worksheet A, you generally can use the Simplified Method Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR to figure your taxable annuity. H&r block free for military However, you must use Worksheet A and Worksheet B in this publication if you chose the alternative annuity option, discussed later. H&r block free for military Line 2. H&r block free for military   See Your cost , earlier, for an explanation of your cost in the plan. H&r block free for military If your annuity starting date is after November 18, 1996, and you chose the alternative annuity option (explained later), you must reduce your cost by the tax-free part of the lump-sum payment you received. H&r block free for military Line 3. H&r block free for military   The number you enter on line 3 is the appropriate number from Table 1 or 2 representing approximate life expectancies in months. H&r block free for military If your annuity starting date is after 1997, use: Table 1 for an annuity without a survivor benefit, or Table 2 for an annuity with a survivor benefit. H&r block free for military If your annuity starting date is before 1998, use Table 1. H&r block free for military Line 6. H&r block free for military   If you received contributions tax free before 2013, the amount previously recovered tax free that you must enter on line 6 is the total amount from line 10 of last year's worksheet. H&r block free for military If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, this amount includes the tax-free part of the lump-sum payment you received. H&r block free for military Example. H&r block free for military Bill Smith retired from the Federal Government on March 31, 2013, under an annuity that will provide a survivor benefit for his wife, Kathy. H&r block free for military His annuity starting date is April 1, 2013, the annuity is paid in arrears, and he received his first monthly annuity payment on May 1, 2013. H&r block free for military He must use the Simplified Method to figure the tax-free part of his annuity benefits. H&r block free for military Bill's monthly annuity benefit is $1,000. H&r block free for military He had contributed $31,000 to his retirement plan and had received no distributions before his annuity starting date. H&r block free for military At his annuity starting date, he was 65 and Kathy was 57. H&r block free for military Bill's completed Worksheet A is shown later. H&r block free for military To complete line 3, he used Table 2 at the bottom of the worksheet and found that 310 is the number in the second column opposite the age range that includes 122 (his and Kathy's combined ages). H&r block free for military Bill keeps a copy of the completed worksheet for his records. H&r block free for military It will help him (and Kathy, if she survives him) figure the taxable amount of the annuity in later years. H&r block free for military Bill's tax-free monthly amount is $100. H&r block free for military (See line 4 of the worksheet. H&r block free for military ) If he lives to collect more than 310 monthly payments, he will generally have to include in his gross income the full amount of any annuity payments received after 310 payments have been made. H&r block free for military If Bill does not live to collect 310 monthly payments and his wife begins to receive monthly payments, she also will exclude $100 from each monthly payment until 310 payments (Bill's and hers) have been collected. H&r block free for military If she dies before 310 payments have been made, a miscellaneous itemized deduction (not subject to the 2%-of-adjusted- gross-income limit) will be allowed for the unrecovered cost on her final income tax return. H&r block free for military General Rule If your annuity starting date is after November 18, 1996, you cannot use the General Rule to figure the tax-free part of your CSRS or FERS annuity. H&r block free for military If your annuity starting date is after July 1, 1986, but before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. H&r block free for military If your annuity starting date is before July 2, 1986, you could have chosen to use the General Rule only if you could not use the Three-Year Rule. H&r block free for military Under the General Rule, you figure the tax-free part of each full monthly payment by multiplying the initial gross monthly rate of your annuity by an exclusion percentage. H&r block free for military Figuring this percentage is complex and requires the use of actuarial tables. H&r block free for military For these tables and other information about using the General Rule, see Publication 939. H&r block free for military Three-Year Rule If your annuity starting date was before July 2, 1986, you probably had to report your annuity using the Three-Year Rule. H&r block free for military Under this rule, you excluded all the annuity payments from income until you fully recovered your cost. H&r block free for military After your cost was recovered, all payments became fully taxable. H&r block free for military You cannot use another rule to again exclude amounts from income. H&r block free for military The Three-Year Rule was repealed for retirees whose annuity starting date is after July 1, 1986. H&r block free for military Worksheet A. H&r block free for military Simplified Method for Bill Smith See the instructions in Part II of this publication under Simplified Method. H&r block free for military 1. H&r block free for military Enter the total pension or annuity payments received this year. H&r block free for military Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. H&r block free for military $ 8,000 2. H&r block free for military Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. H&r block free for military See Your cost in Part II, Rules for Retirees, earlier 2. H&r block free for military 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). H&r block free for military Otherwise, go to line 3. H&r block free for military   3. H&r block free for military Enter the appropriate number from Table 1 below. H&r block free for military 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. H&r block free for military 3. H&r block free for military 310 4. H&r block free for military Divide line 2 by the number on line 3 4. H&r block free for military 100 5. H&r block free for military Multiply line 4 by the number of months for which this year's payments were made. H&r block free for military If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. H&r block free for military Otherwise, go to line 6 5. H&r block free for military 800 6. H&r block free for military Enter any amounts previously recovered tax free in years after 1986. H&r block free for military This is the amount shown on line 10 of your worksheet for last year 6. H&r block free for military 0 7. H&r block free for military Subtract line 6 from line 2 7. H&r block free for military 31,000 8. H&r block free for military Enter the smaller of line 5 or line 7 8. H&r block free for military 800 9. H&r block free for military Taxable amount for year. H&r block free for military Subtract line 8 from line 1. H&r block free for military Enter the result, but not less than zero. H&r block free for military Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. H&r block free for military If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. H&r block free for military If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. H&r block free for military If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. H&r block free for military $7,200 10. H&r block free for military Was your annuity starting date before 1987?   Yes. H&r block free for military Do not complete the rest of this worksheet. H&r block free for military    No. H&r block free for military Add lines 6 and 8. H&r block free for military This is the amount you have recovered tax free through 2013. H&r block free for military You will need this number if you need to fill out this worksheet next year 10. H&r block free for military 800 11. H&r block free for military Balance of cost to be recovered. H&r block free for military Subtract line 10 from line 2. H&r block free for military If zero, you will not have to complete this worksheet next year. H&r block free for military The payments you receive next year will generally be fully taxable 11. H&r block free for military $30,200 Table 1 for Line 3 Above    IF your age on your  annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. H&r block free for military Alternative Annuity Option If you are eligible, you may choose an alternative form of annuity. H&r block free for military If you make this choice, you will receive a lump-sum payment equal to your contributions to the plan and a reduced monthly annuity. H&r block free for military You are eligible to make this choice if you meet all of the following requirements. H&r block free for military You are retiring, but not on disability. H&r block free for military You have a life-threatening illness or other critical medical condition. H&r block free for military You do not have a former spouse entitled to court ordered benefits based on your service. H&r block free for military If you are not eligible or do not choose this alternative annuity, you can skip the following discussion and go to Federal Gift Tax , later. H&r block free for military Lump-Sum Payment The lump-sum payment you receive under the alternative annuity option generally has a tax-free part and a taxable part. H&r block free for military The tax-free part represents part of your cost. H&r block free for military The taxable part represents part of the earnings on your annuity contract. H&r block free for military Your lump-sum credit (discussed later) may include a deemed deposit or redeposit that is treated as being included in your lump-sum payment even though you do not actually receive such amounts. H&r block free for military Deemed deposits and redeposits, which are described later under Lump-sum credit , are taxable to you in the year of retirement. H&r block free for military Your taxable amount may therefore be more than the lump-sum payment you receive. H&r block free for military You must include the taxable part of the lump-sum payment in your income for the year you receive the payment unless you roll it over into another qualified plan or an IRA. H&r block free for military If you do not have OPM transfer the taxable amount to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. H&r block free for military See Rollover Rules , later, for information on how to make a rollover. H&r block free for military OPM can make a direct rollover only up to the amount of the lump-sum payment. H&r block free for military Therefore, to defer tax on the full taxable amount if it is more than the payment, you must add funds from another source. H&r block free for military The taxable part of the lump-sum payment does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. H&r block free for military It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55, even if you reach age 55 in the year you receive the lump-sum payment. H&r block free for military For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. H&r block free for military Worksheet B. H&r block free for military   Use Worksheet B. H&r block free for military Lump-Sum Payment (near the end of this publication), to figure the taxable part of your lump-sum payment. H&r block free for military Be sure to keep the completed worksheet for your records. H&r block free for military   To complete the worksheet, you will need to know the amount of your lump-sum credit and the present value of your annuity contract. H&r block free for military Lump-sum credit. H&r block free for military   Generally, this is the same amount as the lump-sum payment you receive (the total of your contributions to the retirement system). H&r block free for military However, for purposes of the alternative annuity option, your lump-sum credit also may include deemed deposits and redeposits that OPM advanced to your retirement account so that you are given credit for the service they represent. H&r block free for military Deemed deposits (including interest) are for federal employment during which no retirement contributions were taken out of your pay. H&r block free for military Deemed redeposits (including interest) are for any refunds of retirement contributions that you received and did not repay. H&r block free for military You are treated as if you had received a lump-sum payment equal to the amount of your lump-sum credit and then had made a repayment to OPM of the advanced amounts. H&r block free for military Present value of your annuity contract. H&r block free for military   The present value of your annuity contract is figured using actuarial tables provided by the IRS. H&r block free for military If you are receiving a lump-sum payment under the Alternative Annuity Option, you can write to the address below to find out the present value of your annuity contract. H&r block free for military Internal Revenue Service Attn: Actuarial Group 2 TE/GE SE:T:EP:RA:T:A2 NCA-629 1111 Constitution Ave. H&r block free for military , NW Washington, DC 20224-0002 Example. H&r block free for military David Brown retired from the federal government in 2013, one month after his 55th birthday. H&r block free for military He had contributed $31,000 to his retirement plan and chose to receive a lump-sum payment of that amount under the alternative annuity option. H&r block free for military The present value of his annuity contract was $155,000. H&r block free for military The tax-free part and the taxable part of the lump-sum payment are figured using Worksheet B, as shown below. H&r block free for military The taxable part ($24,800) is also his net cost in the plan, which is used to figure the taxable part of his reduced annuity payments. H&r block free for military See Reduced Annuity , later. H&r block free for military Worksheet B. H&r block free for military Lump-Sum Payment for David Brown See the instructions in Part II of this publication under Alternative Annuity Option . H&r block free for military  1. H&r block free for military Enter your lump-sum credit (your cost in the plan at the annuity starting date) 1. H&r block free for military $ 31,000 2. H&r block free for military Enter the present value of your annuity contract 2. H&r block free for military 155,000 3. H&r block free for military Divide line 1 by line 2 3. H&r block free for military . H&r block free for military 20 4. H&r block free for military Tax-free amount. H&r block free for military Multiply line 1 by line 3. H&r block free for military (Caution: Do not include this amount on line 6 of Worksheet A in this publication. H&r block free for military ) 4. H&r block free for military $6,200 5. H&r block free for military Taxable amount (net cost in the plan). H&r block free for military Subtract line 4 from line 1. H&r block free for military Include this amount in the total on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. H&r block free for military Also, enter this amount on line 2 of Worksheet A in this publication. H&r block free for military 5. H&r block free for military $24,800   Lump-sum payment in installments. H&r block free for military   If you choose the alternative annuity option, you usually will receive the lump-sum payment in two equal installments. H&r block free for military You will receive the first installment after you make the choice upon retirement. H&r block free for military The second installment will be paid to you, with interest, in the next calendar year. H&r block free for military (Exceptions to the installment rule are provided for cases of critical medical need. H&r block free for military )   Even though the lump-sum payment is made in installments, the overall tax treatment (explained at the beginning of this discussion) is the same as if the whole payment were paid at once. H&r block free for military If the payment has a tax-free part, you must treat the taxable part as received first. H&r block free for military How to report. H&r block free for military   Add any actual or deemed payment of your lump-sum credit (defined earlier) to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. H&r block free for military Add the taxable part to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b, unless you roll over the taxable part to your traditional IRA or a qualified retirement plan. H&r block free for military    If you receive the lump-sum payment in two installments, include any interest paid with the second installment on line 8a of either Form 1040 or Form 1040A, or on line 9a of Form 1040NR. H&r block free for military Reduced Annuity If you have chosen to receive a lump-sum payment under the alternative annuity option, you also will receive reduced monthly annuity payments. H&r block free for military These annuity payments each will have a tax-free and a taxable part. H&r block free for military To figure the tax-free part of each annuity payment, you must use the Simplified Method (Worksheet A). H&r block free for military For instructions on how to complete the worksheet, see Worksheet A under Simplified Method, earlier. H&r block free for military To complete Worksheet A, line 2, you must reduce your cost in the plan by the tax-free part of the lump-sum payment you received. H&r block free for military Enter as your net cost on line 2 the amount from Worksheet B, line 5. H&r block free for military Do not include the tax-free part of the lump-sum payment with other amounts recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. H&r block free for military Example. H&r block free for military The facts are the same as in the example for David Brown in the preceding discussion. H&r block free for military In addition, David received 10 annuity payments in 2013 of $1,200 each. H&r block free for military Using Worksheet A, he figures the taxable part of his annuity payments. H&r block free for military He completes line 2 by reducing his $31,000 cost by the $6,200 tax-free part of his lump-sum payment. H&r block free for military His entry on line 2 is his $24,800 net cost in the plan (the amount from Worksheet B, line 5). H&r block free for military He does not include the tax-free part of his lump-sum payment on Worksheet A, line 6. H&r block free for military David's filled-in Worksheet A is shown on the next page. H&r block free for military Worksheet A. H&r block free for military Simplified Method for David Brown See the instructions in Part II of this publication under Simplified Method . H&r block free for military 1. H&r block free for military Enter the total pension or annuity payments received this year. H&r block free for military Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. H&r block free for military $ 12,000 2. H&r block free for military Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. H&r block free for military See Your cost in Part II, Rules for Retirees, earlier 2. H&r block free for military 24,800 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). H&r block free for military Otherwise, go to line 3. H&r block free for military   3. H&r block free for military Enter the appropriate number from Table 1 below. H&r block free for military 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. H&r block free for military 3. H&r block free for military 360 4. H&r block free for military Divide line 2 by the number on line 3 4. H&r block free for military 68. H&r block free for military 89 5. H&r block free for military Multiply line 4 by the number of months for which this year's payments were made. H&r block free for military If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. H&r block free for military Otherwise, go to line 6 5. H&r block free for military 688. H&r block free for military 90 6. H&r block free for military Enter any amounts previously recovered tax free in years after 1986. H&r block free for military This is the amount shown on line 10 of your worksheet for last year 6. H&r block free for military 0 7. H&r block free for military Subtract line 6 from line 2 7. H&r block free for military 24,800 8. H&r block free for military Enter the smaller of line 5 or line 7 8. H&r block free for military 688. H&r block free for military 90 9. H&r block free for military Taxable amount for year. H&r block free for military Subtract line 8 from line 1. H&r block free for military Enter the result, but not less than zero. H&r block free for military Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. H&r block free for military If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. H&r block free for military If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. H&r block free for military If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. H&r block free for military $11,311. H&r block free for military 10 10. H&r block free for military Was your annuity starting date before 1987?   Yes. H&r block free for military Do not complete the rest of this worksheet. H&r block free for military    No. H&r block free for military Add lines 6 and 8. H&r block free for military This is the amount you have recovered tax free through 2013. H&r block free for military You will need this number if you need to fill out this worksheet next year 10. H&r block free for military 688. H&r block free for military 90 11. H&r block free for military Balance of cost to be recovered. H&r block free for military Subtract line 10 from line 2. H&r block free for military If zero, you will not have to complete this worksheet next year. H&r block free for military The payments you receive next year will generally be fully taxable 11. H&r block free for military $24,111. H&r block free for military 10 Table 1 for Line 3 Above    IF your age on your annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. H&r block free for military Reemployment after choosing the alternative annuity option. H&r block free for military If you chose this option when you retired and then you were reemployed by the Federal Government before retiring again, your Form CSA 1099R may show only the amount of your contributions to your retirement plan during your reemployment. H&r block free for military If the amount on the form does not include all your contributions, disregard it and use your total contributions to figure the taxable part of your annuity payments. H&r block free for military Annuity starting date before November 19, 1996. H&r block free for military   If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, the taxable and tax-free parts of your lump-sum payment and your annuity payments are figured using different rules. H&r block free for military Under those rules, you do not reduce your cost in the plan (Worksheet A, line 2) by the tax-free part of the lump-sum payment. H&r block free for military However, you must include that tax-free amount with other amounts previously recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. H&r block free for military Federal Gift Tax If, through the exercise or nonexercise of an election or option, you provide an annuity for your beneficiary at or after your death, you have made a gift. H&r block free for military The gift may be taxable for gift tax purposes. H&r block free for military The value of the gift is equal to the value of the annuity. H&r block free for military Joint and survivor annuity. H&r block free for military   If the gift is an interest in a joint and survivor annuity where only you and your spouse can receive payments before the death of the last spouse to die, the gift generally will qualify for the unlimited marital deduction. H&r block free for military This will eliminate any gift tax liability with regard to that gift. H&r block free for military   If you provide survivor annuity benefits for someone other than your current spouse, such as your former spouse, the unlimited marital deduction will not apply. H&r block free for military This may result in a taxable gift. H&r block free for military More information. H&r block free for military   For information about the gift tax, see Publication 950, Introduction to Estate and Gift Taxes, and Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, and its instructions. H&r block free for military Retirement During the Past Year If you have recently retired, the following discussions covering annual leave, voluntary contributions, and community property may apply to you. H&r block free for military Annual leave. H&r block free for military   A payment for accrued annual leave received on retirement is a salary payment. H&r block free for military It is taxable as wages in the tax year you receive it. H&r block free for military Voluntary contributions. H&r block free for military   Voluntary contributions to the retirement fund are those made in addition to the regular contributions that were deducted from your salary. H&r block free for military They also include the regular contributions withheld from your salary after you have the years of service necessary for the maximum annuity allowed by law. H&r block free for military Voluntary contributions are not the same as employee contributions to the Thrift Savings Plan. H&r block free for military See Thrift Savings Plan , later. H&r block free for military Additional annuity benefit. H&r block free for military   If you choose to receive an additional annuity benefit from your voluntary contributions, it is treated separately from the annuity benefit that comes from the regular contributions deducted from your salary. H&r block free for military This separate treatment applies for figuring the amounts to be excluded from, and included in, gross income. H&r block free for military It does not matter that you receive only one monthly check covering both benefits. H&r block free for military Each year you will receive a Form CSA 1099R that will show how much of your total annuity received in the past year was from each type of benefit. H&r block free for military   Figure the taxable and tax-free parts of your additional monthly benefits from voluntary contributions using the rules that apply to regular CSRS and FERS annuities, as explained earlier. H&r block free for military Refund of voluntary contributions. H&r block free for military   If you choose to receive a refund of your voluntary contributions plus accrued interest, the interest is taxable to you in the tax year it is distributed unless you roll it over to a traditional IRA or another qualified retirement plan. H&r block free for military If you do not have OPM transfer the interest to a traditional IRA or other qualified retirement plan in a direct rollover, tax will be withheld at a 20% rate. H&r block free for military See Rollover Rules , later. H&r block free for military The interest does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. H&r block free for military It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55. H&r block free for military For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. H&r block free for military Community property laws. H&r block free for military   State community property laws apply to your annuity. H&r block free for military These laws will affect your income tax only if you file a return separately from your spouse. H&r block free for military   Generally, the determination of whether your annuity is separate income (taxable to you) or community income (taxable to both you and your spouse) is based on your marital status and domicile when you were working. H&r block free for military Regardless of whether you are now living in a community property state or a noncommunity property state, your current annuity may be community income if it is based on services you performed while married and domiciled in a community property state. H&r block free for military   At any time, you have only one domicile even though you may have more than one home. H&r block free for military Your domicile is your fixed and permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. H&r block free for military The question of your domicile is mainly a matter of your intentions as indicated by your actions. H&r block free for military   If your annuity is a mixture of community income and separate income, you must divide it between the two kinds of income. H&r block free for military The division is based on your periods of service and domicile in community and noncommunity property states while you were married. H&r block free for military   For more information, see Publication 555, Community Property. H&r block free for military Reemployment After Retirement If you retired from federal service and are later rehired by the Federal Government as an employee, you can continue to receive your annuity during reemployment. H&r block free for military The employing agency usually will pay you the difference between your salary for your period of reemployment and your annuity. H&r block free for military This amount is taxable as wages. H&r block free for military Your annuity will continue to be taxed just as it was before. H&r block free for military If you are still recovering your cost, you continue to do so. H&r block free for military If you have recovered your cost, the annuity you receive while you are reemployed generally is fully taxable. H&r block free for military Nonresident Aliens The following special rules apply to nonresident alien federal employees performing services outside the United States and to nonresident alien retirees and beneficiaries. H&r block free for military A nonresident alien is an individual who is not a citizen or a resident alien of the United States. H&r block free for military Special rule for figuring your total contributions. H&r block free for military   Your contributions to the retirement plan (your cost) also include the government's contributions to the plan to a certain extent. H&r block free for military You include government contributions that would not have been taxable to you at the time they were contributed if they had been paid directly to you. H&r block free for military For example, government contributions would not have been taxable to you if, at the time made, your services were performed outside the United States. H&r block free for military Thus, your cost is increased by these government contributions and the benefits that you, or your beneficiary, must include in income are reduced. H&r block free for military   This method of figuring your total contributions does not apply to any contributions the government made on your behalf after you became a citizen or a resident alien of the United States. H&r block free for military Limit on taxable amount. H&r block free for military   There is a limit on the taxable amount of payments received from the CSRS, the FERS, or the TSP by a nonresident alien retiree or nonresident alien beneficiary. H&r block free for military Figure this limited taxable amount by multiplying the otherwise taxable amount by a fraction. H&r block free for military The numerator of the fraction is the retiree's total U. H&r block free for military S. H&r block free for military Government basic pay, other than tax-exempt pay for services performed outside the United States. H&r block free for military The denominator is the retiree's total U. H&r block free for military S. H&r block free for military Government basic pay for all services. H&r block free for military    Basic pay includes regular pay plus any standby differential. H&r block free for military It does not include bonuses, overtime pay, certain retroactive pay, uniform or other allowances, or lump-sum leave payments. H&r block free for military   To figure the limited taxable amount of your CSRS or FERS annuity or your TSP distributions, use Worksheet C. H&r block free for military (For an annuity, first complete Worksheet A in this publication. H&r block free for military ) Worksheet C. H&r block free for military Limited Taxable Amount for Nonresident Alien 1. H&r block free for military Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. H&r block free for military   2. H&r block free for military Enter the total U. H&r block free for military S. H&r block free for military Government basic pay other than tax-exempt pay for services performed outside the United States 2. H&r block free for military   3. H&r block free for military Enter the total U. H&r block free for military S. H&r block free for military Government basic pay for all services 3. H&r block free for military   4. H&r block free for military Divide line 2 by line 3 4. H&r block free for military   5. H&r block free for military Limited taxable amount. H&r block free for military Multiply line 1 by line 4. H&r block free for military Enter this amount on Form 1040NR, line 17b 5. H&r block free for military   Example 1. H&r block free for military You are a nonresident alien who performed all services for the U. H&r block free for military S. H&r block free for military Government abroad as a nonresident alien. H&r block free for military You retired and began to receive a monthly annuity of $200. H&r block free for military Your total basic pay for all services for the U. H&r block free for military S. H&r block free for military Government was $100,000. H&r block free for military All of your basic pay was tax exempt because it was not U. H&r block free for military S. H&r block free for military source income. H&r block free for military The taxable amount of your annuity using Worksheet A in this publication is $720. H&r block free for military You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. H&r block free for military Worksheet C. H&r block free for military Limited Taxable Amount for Nonresident Alien — Example 1 1. H&r block free for military Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. H&r block free for military $ 720 2. H&r block free for military Enter the total U. H&r block free for military S. H&r block free for military Government basic pay other than tax-exempt pay for services performed outside the United States 2. H&r block free for military 0 3. H&r block free for military Enter the total U. H&r block free for military S. H&r block free for military Government basic pay for all services 3. H&r block free for military 100,000 4. H&r block free for military Divide line 2 by line 3 4. H&r block free for military 0 5. H&r block free for military Limited taxable amount. H&r block free for military Multiply line 1 by line 4. H&r block free for military Enter this amount on Form 1040NR, line 17b 5. H&r block free for military 0 Example 2. H&r block free for military You are a nonresident alien who performed services for the U. H&r block free for military S. H&r block free for military Government as a nonresident alien both within the United States and abroad. H&r block free for military You retired and began to receive a monthly annuity of $240. H&r block free for military Your total basic pay for your services for the U. H&r block free for military S. H&r block free for military Government was $120,000; $40,000 was for work done in the United States and $80,000 was for your work done in a foreign country. H&r block free for military The part of your total basic pay for your work done in a foreign country was tax exempt because it was not U. H&r block free for military S. H&r block free for military source income. H&r block free for military The taxable amount of your annuity figured using Worksheet A in this publication is $1,980. H&r block free for military You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. H&r block free for military Worksheet C. H&r block free for military Limited Taxable Amount for Nonresident Alien — Example 2 1. H&r block free for military Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. H&r block free for military $ 1,980 2. H&r block free for military Enter the total U. H&r block free for military S. H&r block free for military Government basic pay other than tax-exempt pay for services performed outside the United States 2. H&r block free for military 40,000 3. H&r block free for military Enter the total U. H&r block free for military S. H&r block free for military Government basic pay for all services 3. H&r block free for military 120,000 4. H&r block free for military Divide line 2 by line 3 4. H&r block free for military . H&r block free for military 333 5. H&r block free for military Limited taxable amount. H&r block free for military Multiply line 1 by line 4. H&r block free for military Enter this amount on Form 1040NR, line 17b 5. H&r block free for military 659 Thrift Savings Plan Generally, all of the money in your TSP account is taxed as ordinary income when you receive it. H&r block free for military (However, see Roth TSP balance and Uniformed services TSP accounts, next. H&r block free for military ) This is because neither the contributions to your traditional TSP balance nor its earnings have been included previously in your taxable income. H&r block free for military The way that you withdraw your account balance determines when you must pay the tax. H&r block free for military Roth TSP balance. H&r block free for military   The TSP also offers a Roth TSP option, which allows you to make after-tax contributions into your TSP account. H&r block free for military This means Roth TSP contributions are included in your income. H&r block free for military The contribution limits are the same as the traditional TSP. H&r block free for military You can elect to have part or all of your TSP contributions designated as a Roth TSP. H&r block free for military Agency contributions will be part of your traditional TSP balance. H&r block free for military Also, you cannot roll over any portion of your traditional TSP into your Roth TSP. H&r block free for military   Qualified distributions from your Roth TSP are not included in income. H&r block free for military This applies to both your cost in the account and income earned on that account. H&r block free for military A qualified distribution is generally a distribution that is: Made after a 5-tax-year period of participation, and Made on or after the date you reach age 59½, made to a beneficiary or your estate on or after your death, or attributable to your being disabled. H&r block free for military   For more information, go to the TSP website, www. H&r block free for military tsp. H&r block free for military gov, or the TSP Service Office. H&r block free for military See Publication 575, Pension and Annuity Income, for more information about designated Roth accounts. H&r block free for military Uniformed services TSP accounts. H&r block free for military   If you have a uniformed services TSP account that includes contributions from combat zone pay, the distributions attributable to those contributions are tax exempt. H&r block free for military However, any earnings on those contributions to a traditional TSP balance are subject to tax when they are distributed. H&r block free for military See Roth TSP balance discussed previously to get more information about Roth contributions. H&r block free for military The statement you receive from the TSP will separately state the total amount of your distribution and the amount of your taxable distribution for the year. H&r block free for military You can get more information from the TSP website, www. H&r block free for military tsp. H&r block free for military gov, or the TSP Service Office. H&r block free for military Direct rollover by the TSP. H&r block free for military   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a traditional IRA or other qualified retirement plan, the tax on that part is deferred until you receive payments from the traditional IRA or other plan. H&r block free for military However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. H&r block free for military Also, see Rollover Rules , later. H&r block free for military Direct rollover by the TSP to a Roth IRA. H&r block free for military   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a Roth IRA, the amount transferred will be taxed in the current year. H&r block free for military However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. H&r block free for military Also, see Rollovers to Roth IRAs for more information, later. H&r block free for military Note. H&r block free for military A direct rollover of your Roth contributions and its earnings (if certain conditions are met, see Roth TSP balance , earlier) in your TSP account to a Roth 401(k), Roth 403(b), Roth 457(b), or Roth IRA are not subject to tax when they are transferred or when you receive payments from those accounts at a later date. H&r block free for military This is because you already paid tax on those contributions. H&r block free for military You cannot rollover Roth contributions and its earnings in your TSP account to a traditional IRA. H&r block free for military TSP annuity. H&r block free for military   If you ask the TSP to buy an annuity with the money in your account, from traditional contributions and its earnings, the annuity payments are taxed when you receive them. H&r block free for military The payments are not subject to the additional 10% tax on early distributions, even if you are under age 55 when they begin. H&r block free for military However, there is no tax on the annuity payments if the annuity is purchased using the money in your account from Roth contributions and its earnings if certain conditions are met. H&r block free for military See Roth TSP balance , earlier. H&r block free for military This is because you already paid tax on those contributions. H&r block free for military Cash withdrawals. H&r block free for military   If you withdraw any of the money in your TSP account, from traditional contributions and its earnings, it is generally taxed as ordinary income when you receive it unless you roll it over into a traditional IRA or other qualified plan. H&r block free for military (See Rollover Rules , later. H&r block free for military ) If you receive your entire TSP account balance in a single tax year, you may be able to use the 10-year tax option to figure your tax. H&r block free for military See Lump-Sum Distributions in Publication 575 for details. H&r block free for military However, there is no tax if you withdraw money in your TSP account from Roth contributions and its earnings if certain conditions are met. H&r block free for military See Roth TSP balance , earlier. H&r block free for military    To qualify for the 10-year tax option, the plan participant must have been born before January 2, 1936. H&r block free for military   If you receive a single payment or you choose to receive your account balance in monthly payments over a period of less than 10 years, the TSP generally must withhold 20% for federal income tax. H&r block free for military If you choose to receive your account balance in monthly payments over a period of 10 or more years or a period based on your life expectancy, the payments are subject to withholding as if you are married with three withholding allowances, unless you submit a withholding certificate. H&r block free for military See also Withholding from Thrift Savings Plan payments earlier under Tax Withholding and Estimated Tax in Part I. H&r block free for military However, there is no withholding requirement for amounts withdrawn from your TSP account that is from Roth contributions and its earnings, if certain conditions are met. H&r block free for military See Roth TSP balance , earlier, for a discussion of those conditions. H&r block free for military Tax on early distributions. H&r block free for military   Any money paid to you from your TSP account before you reach age 59½ may be subject to an additional 10% tax on early distributions. H&r block free for military However, this additional tax does not apply in certain situations, including any of the following. H&r block free for military You receive the distribution and separate from government service during or after the calendar year in which you reach age 55. H&r block free for military You choose to receive your account balance in monthly payments based on your life expectancy. H&r block free for military You are totally and permanently disabled. H&r block free for military You receive amounts from your Roth contributions since that represents a return of your cost (after-tax money). H&r block free for military The earnings may be subject to the 10% tax depending on whether you met certain conditions. H&r block free for military See Roth TSP balance , earlier. H&r block free for military   For more information, see Tax on Early Distributions in Publication 575. H&r block free for military Outstanding loan. H&r block free for military   If the TSP declares a distribution from your account because money you borrowed has not been repaid when you separate from government service, your account is reduced and the amount of the distribution (your unpaid loan balance and any unpaid interest), from traditional contributions and its earnings, is taxed in the year declared. H&r block free for military The distribution also may be subject to the additional 10% tax on early distributions. H&r block free for military However, the tax will be deferred if you make a rollover contribution to a traditional IRA or other qualified plan equal to the declared distribution amount. H&r block free for military See Rollover Rules , later. H&r block free for military   If you withdraw any money from your TSP account in that same year, the TSP must withhold income tax of 20% of the total of the declared distribution and the amount withdrawn. H&r block free for military However, no withholding is required for portions of the distribution that is from Roth contributions and its earnings, if certain conditions are met. H&r block free for military See Roth TSP balance , earlier. H&r block free for military More information. H&r block free for military   For more information about the TSP, see Summary of the Thrift Savings Plan, distributed to all federal employees. H&r block free for military Also, see Important Tax Information About Payments From Your TSP Account and Special Tax Withholding Rules for Thrift Savings Plan Payments to Nonresident Aliens, which are available from your agency personnel office or from the TSP by calling 1-TSP-YOU-FIRST (1-877-968-3778) and for participants who are deaf, hard of hearing, or have a speech disability, call 1-TSP-THRIFT5 (1-877-847-4385). H&r block free for military    The above documents are also available on the TSP website at www. H&r block free for military tsp. H&r block free for military gov. H&r block free for military Select “Forms & Publications. H&r block free for military ” Rollover Rules Generally, a rollover is a tax-free withdrawal of cash or other assets from one qualified retirement plan or traditional IRA and its reinvestment in another qualified retirement plan or traditional IRA. H&r block free for military You do not include the amount rolled over in your income, and you cannot take a deduction for it. H&r block free for military The amount rolled over is taxed later as the new program pays that amount to you. H&r block free for military If you roll over amounts into a traditional IRA, later distributions of these amounts from the traditional IRA do not qualify for the capital gain or the 10-year tax option. H&r block free for military However, capital gain treatment or the 10-year tax option will be restored if the traditional IRA contains only amounts rolled over from a qualified plan and these amounts are rolled over from the traditional IRA into a qualified retirement plan. H&r block free for military To qualify for the capital gain treatment or 10-year tax option, the plan participant must have been born before January 2, 1936. H&r block free for military You can also roll over a distribution from a qualified retirement plan into a Roth IRA. H&r block free for military Although the transfer of a distribution into a Roth IRA is considered a rollover for Roth IRA purposes, it is not a tax-free transfer unless you are rolling over amounts from Roth contributions and its earnings. H&r block free for military See Rollovers to Roth IRAs , later, for more information. H&r block free for military Qualified retirement plan. H&r block free for military   For this purpose, a qualified retirement plan generally is: A qualified employee plan, A qualified employee annuity, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan. H&r block free for military The CSRS, FERS, and TSP are considered qualified retirement plans. H&r block free for military Distributions eligible for rollover treatment. H&r block free for military   If you receive a refund of your CSRS or FERS contributions when you leave government service, you can roll over any interest you receive on the contributions. H&r block free for military You cannot roll over any part of your CSRS or FERS annuity payments. H&r block free for military   You can roll over a distribution of any part of your TSP account balance except: A distribution of your account balance that you choose to receive in monthly payments over: Your life expectancy, The joint life expectancies of you and your beneficiary, or A period of 10 years or more, A required minimum distribution generally beginning at age 70½, A declared distribution because of an unrepaid loan, if you have not separated from government service (see Outstanding loan under Thrift Savings Plan, earlier), or A hardship distribution. H&r block free for military   In addition, a distribution to your beneficiary generally is not treated as an eligible rollover distribution. H&r block free for military However, see Qualified domestic relations order (QDRO) and Rollovers by surviving spouse , and Rollovers by nonspouse beneficiary , later. H&r block free for military Direct rollover option. H&r block free for military   You can choose to have the OPM or TSP transfer any part of an eligible rollover distribution directly to another qualified retirement plan that accepts rollover distributions or to a traditional IRA or Roth IRA. H&r block free for military   There is an automatic rollover requirement for mandatory distributions. H&r block free for military A mandatory distribution is a distribution made without your consent and before you reach age 62 or normal retirement age, whichever is later. H&r block free for military The automatic rollover requirement applies if the distribution is more than $1,000 and is an eligible rollover distribution. H&r block free for military You can choose to have the distribution paid directly to you or rolled over directly to your traditional or Roth IRA or another qualified retirement plan. H&r block free for military If you do not make this choice, OPM will automatically roll over the distribution into an IRA of a designated trustee or issuer. H&r block free for military No tax withheld. H&r block free for military   If you choose the direct rollover option or have an automatic rollover, no tax will be withheld from any part of the distribution that is directly paid to the trustee of the other plan. H&r block free for military However, if the rollover is to a Roth IRA, you may want to choose to have tax withheld since any amount rolled over is generally included in income. H&r block free for military Any part of the eligible rollover distribution paid to you is subject to withholding at a 20% rate. H&r block free for military Direct roll over amounts from Roth contributions and its earnings do not have tax withheld because you already paid tax on those amounts. H&r block free for military Payment to you option. H&r block free for military   If an eligible rollover distribution is paid to you, the OPM or TSP must withhold 20% for income tax even if you plan to roll over the distribution to another qualified retirement plan, traditional or Roth IRA. H&r block free for military However, the full amount is treated as distributed to you even though you actually receive only 80%. H&r block free for military You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional IRA. H&r block free for military Rollovers to Roth IRAs are generally included in income. H&r block free for military Eligible rollover distributions that are from Roth contributions do not have tax withheld because you already paid tax on those amounts. H&r block free for military If you leave government service before the calendar year in which you reach age 55 and are under age 59½ when a distribution is paid to you, you may have to pay an additional 10% tax on any part, including any tax withheld, that you do not roll over. H&r block free for military However, distributions from Roth contributions will not be subject to the 10% additional tax because it is a return of your cost (after-tax money). H&r block free for military Earnings from those contributions may be subject to the 10% additional tax if certain conditions are not met. H&r block free for military See Roth TSP balance , earlier. H&r block free for military Also, see Tax on Early Distributions in Publication 575. H&r block free for military Exception to withholding. H&r block free for military   Withholding from an eligible rollover distribution paid to you is not required if the distributions for your tax year total less than $200. H&r block free for military Partial rollovers. H&r block free for military   A lump-sum distribution may qualify for capital gain treatment or the 10-year tax option if the plan participant was born before January 2, 1936. H&r block free for military See Lump-Sum Distributions in Publication 575. H&r block free for military However, if you roll over any part of the distribution, the part you keep does not qualify for this special tax treatment. H&r block free for military Rolling over more than amount received. H&r block free for military   If you want to roll over more of an eligible rollover distribution than the amount you received after income tax was withheld, you will have to add funds from some other source (such as your savings or borrowed amounts). H&r block free for military Example. H&r block free for military You left government service at age 53. H&r block free for military On February 1, 2013, you receive an eligible rollover distribution of $10,000 from you
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The H&r Block Free For Military

H&r block free for military Publication 521 - Introductory Material Table of Contents What's New Reminders IntroductionOrdering forms and publications. H&r block free for military Tax questions. H&r block free for military Useful Items - You may want to see: What's New Standard mileage rate. H&r block free for military  For 2013, the standard mileage rate for using your vehicle to move to a new home is 24 cents per mile. H&r block free for military See Travel by car under Deductible Moving Expenses. H&r block free for military Reminders Future developments. H&r block free for military  For the latest information about developments related to Publication 521, such as legislation enacted after it was published, go to www. H&r block free for military irs. H&r block free for military gov/pub521. H&r block free for military Change of address. H&r block free for military  If you change your mailing address, be sure to notify the IRS using Form 8822, Change of Address. H&r block free for military Mail it to the Internal Revenue Service Center for your old address. H&r block free for military Addresses for the service centers are on the back of the form. H&r block free for military If you change your business address or the identity of your responsible party, use Form 8822-B, Change of Address or Responsible Party—Business. H&r block free for military Photographs of missing children. H&r block free for military  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. H&r block free for military Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. H&r block free for military You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. H&r block free for military Introduction This publication explains the deduction of certain expenses of moving to a new home because you changed job locations or started a new job. H&r block free for military It includes the following topics. H&r block free for military Who can deduct moving expenses. H&r block free for military What moving expenses are deductible. H&r block free for military What moving expenses are not deductible. H&r block free for military How a reimbursement affects your moving expense deduction. H&r block free for military How and when to report moving expenses. H&r block free for military Special rules for members of the Armed Forces. H&r block free for military Form 3903, Moving Expenses, is used to claim the moving expense deduction. H&r block free for military An example of how to report your moving expenses, including a filled-in Form 3903, is shown near the end of the publication. H&r block free for military You may be able to deduct moving expenses whether you are self-employed or an employee. H&r block free for military Your expenses generally must be related to starting work at your new job location. H&r block free for military However, certain retirees and survivors may qualify to claim the deduction even though they are not starting work at a new job location. H&r block free for military See Who Can Deduct Moving Expenses. H&r block free for military Recordkeeping. H&r block free for military    It is important to maintain an accurate record of expenses you paid to move. H&r block free for military You should save items such as receipts, bills, cancelled checks, credit card statements, and mileage logs. H&r block free for military Also, you should save your Form W-2 and statements of reimbursement from your employer. H&r block free for military Comments and suggestions. H&r block free for military   We welcome your comments about this publication and your suggestions for future editions. H&r block free for military   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. H&r block free for military NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. H&r block free for military Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. H&r block free for military   You can send your comments from www. H&r block free for military irs. H&r block free for military gov/formspubs/. H&r block free for military Click on “More Information” and then on “Comment on Tax Forms and Publications”. H&r block free for military   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. H&r block free for military Ordering forms and publications. H&r block free for military   Visit www. H&r block free for military irs. H&r block free for military gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. H&r block free for military Internal Revenue Service 1201 N. H&r block free for military Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. H&r block free for military   If you have a tax question, check the information available on IRS. H&r block free for military gov or call 1-800-829-1040. H&r block free for military We cannot answer tax questions sent to either of the above addresses. H&r block free for military Useful Items - You may want to see: Publication 3 Armed Forces' Tax Guide Forms (and Instructions) 1040 U. H&r block free for military S. H&r block free for military Individual Income Tax Return 1040X Amended U. H&r block free for military S. H&r block free for military Individual Income Tax Return 3903 Moving Expenses 8822 Change of Address 8822–B Change of Address or Responsible Party-Business See How To Get Tax Help, near the end of this publication, for information about getting the publications and the forms listed above. H&r block free for military Prev  Up  Next   Home   More Online Publications