Introduction

This publication discusses the tax treatment of distributions you receive from pension and annuity plans and also shows you how to report the income on your federal income tax return. How these distributions are taxed depends on whether they are periodic payments (amounts received as an annuity) that are paid at regular intervals

over several years or nonperiodic payments (amounts not received as an annuity).

What is covered in this publication? This publication contains information that you need to understand the following topics.

• How to figure the tax-free part of periodic payments under a pension or annuity plan, including using a simple worksheet for payments under a qualified plan.

• How to figure the tax-free part of nonperiodic payments from qualified and nonqualified plans, and how to use the optional methods to figure the tax on lump-sum distributions from pension, stock bonus, and profit-sharing plans.

• How to roll over certain distributions from a retirement plan into another retirement plan or IRA.

• How to report disability payments, and how beneficiaries and survivors of employees and retirees must report benefits paid to them.

• How to report railroad retirement benefits.

• When additional taxes on certain distributions may apply (including the tax on early distributions and the tax on excess accumulation).

For additional information on how to report pen-

TIP sion or annuity payments on your federal income

tax return, be sure to review the instructions on the back of Copies B, C, and 2 of the Form 1099-R, Distri- butions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., that you received and the instructions for Form 1040, lines 5a, 5b, and 5c, and the instructions for Form 1040-NR, lines 5a, 5b, and 5c.

A “corrected” Form 1099-R replaces the corre-