Publication 721 - Tax Guide To U.s. Civil Service Retirement Benefits - 2011 Page 12
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31Worksheet C. Limited Taxable Amount
Worksheet C. Limited Taxable Amount
for Nonresident Alien
for Nonresident Alien —
Example 2
Keep for Your Records
1. Enter the otherwise taxable amount of
1. Enter the otherwise taxable amount of
the CSRS or FERS annuity (from line 9
the CSRS or FERS annuity (from line 9
of Worksheet A or from Forms CSA
of Worksheet A or from Forms CSA
1099R or CSF 1099R) or TSP
1099R or CSF 1099R) or TSP
distributions (from Form 1099R) . . . . . . 1.
distributions (from Form 1099R) . . . . . . 1. $
1,980
2. Enter the total U.S. Government basic
2. Enter the total U.S. Government basic
pay other than tax-exempt pay for
pay other than tax-exempt pay for
services performed outside the United
services performed outside the United
States . . . . . . . . . . . . . . . . . . . . . . . . 2.
States . . . . . . . . . . . . . . . . . . . . . . . . 2.
40,000
3. Enter the total U.S. Government basic
3. Enter the total U.S. Government basic
pay for all services . . . . . . . . . . . . . . . . 3.
pay for all services . . . . . . . . . . . . . . . . 3.
120,000
4. Divide line 2 by line 3 . . . . . . . . . . . . . . 4.
4. Divide line 2 by line 3 . . . . . . . . . . . . . . 4.
.333
5. Limited taxable amount. Multiply line 1
5. Limited taxable amount. Multiply line 1
by line 4. Enter this amount on Form
by line 4. Enter this amount on Form
1040NR, line 17b . . . . . . . . . . . . . . . . 5.
1040NR, line 17b . . . . . . . . . . . . . . . . 5.
659
Example 1. You are a nonresident alien who performed
Thrift Savings Plan
all services for the U.S. Government abroad as a nonresi-
dent alien. You retired and began to receive a monthly
All of the money in your TSP account is taxed as ordinary
annuity of $200. Your total basic pay for all services for the
income when you receive it. (However, see Uniformed
U.S. Government was $100,000. All of your basic pay was
services TSP accounts, next.) This is because neither the
tax exempt because it was not U.S. source income.
contributions to your TSP account nor its earnings have
The taxable amount of your annuity using Worksheet A
been included previously in your taxable income. The way
in this publication is $720. You are a nonresident alien, so
that you withdraw your account balance determines when
you figure the limited taxable amount of your annuity using
you must pay the tax.
Worksheet C as follows.
Uniformed services TSP accounts. If you have a uni-
formed services TSP account that includes contributions
Worksheet C. Limited Taxable Amount
from combat zone pay, the distributions attributable to
for Nonresident Alien —
those contributions are tax exempt. However, any earn-
Example 1
ings on those contributions are subject to tax when they
are distributed. The statement you receive from the TSP
1. Enter the otherwise taxable amount of
will separately state the total amount of your distribution
the CSRS or FERS annuity (from line 9
and the amount of your taxable distribution for the year.
of Worksheet A or from Forms CSA
1099R or CSF 1099R) or TSP
You can get more information from the TSP website,
distributions (from Form 1099R) . . . . . . 1. $
720
, or the TSP Service Office.
2. Enter the total U.S. Government basic
Direct rollover by the TSP. If you ask the TSP to transfer
pay other than tax-exempt pay for
services performed outside the United
any part of the money in your account to a traditional IRA or
States . . . . . . . . . . . . . . . . . . . . . . . . 2.
0
other qualified retirement plan, the tax on that part is
3. Enter the total U.S. Government basic
deferred until you receive payments from the traditional
pay for all services . . . . . . . . . . . . . . . . 3.
100,000
IRA or other plan. See
Rollover
Rules, later.
4. Divide line 2 by line 3 . . . . . . . . . . . . . . 4.
0
5. Limited taxable amount. Multiply line 1
Direct rollover by the TSP to a Roth IRA. If you ask the
by line 4. Enter this amount on Form
TSP to transfer any part of the money in your account to a
1040NR, line 17b . . . . . . . . . . . . . . . . 5.
0
Roth IRA, the amount transferred will be taxed in the
current year. See
Rollovers to Roth IRAs
for more informa-
tion, later.
Example 2. You are a nonresident alien who performed
TSP annuity. If you ask the TSP to buy an annuity with the
services for the U.S. Government as a nonresident alien
money in your account, the annuity payments are taxed
both within the United States and abroad. You retired and
when you receive them. The payments are not subject to
began to receive a monthly annuity of $240.
the additional 10% tax on early distributions, even if you
Your total basic pay for your services for the U.S. Gov-
are under age 55 when they begin.
ernment was $120,000; $40,000 was for work done in the
United States and $80,000 was for your work done in a
Cash withdrawals. If you withdraw any of the money in
foreign country. The part of your total basic pay for your
your TSP account, it is generally taxed as ordinary income
work done in a foreign country was tax exempt because it
when you receive it unless you roll it over into a traditional
was not U.S. source income.
IRA or other qualified plan. (See
Rollover
Rules, later.) If
The taxable amount of your annuity figured using Work-
you receive your entire TSP account balance in a single
sheet A in this publication is $1,980. You are a nonresident
tax year, you may be able to use the 10-year tax option to
alien, so you figure the limited taxable amount of your
figure your tax. See Lump-Sum Distributions in Publication
annuity using Worksheet C as follows.
575 for details.
Page 12
Publication 721 (2011)
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