Publication 721 - Tax Guide To U.s. Civil Service Retirement Benefits - 2011 Page 17
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31Withholding. For income tax withholding purposes, a dis-
retirement annuity and you can begin to recover the cost of
your annuity under the rules discussed in
Part II, Rules for
ability annuity is treated the same as a nondisability annu-
Retirees.
ity. This treatment also applies to disability payments
If you find that you could have started your recovery in
received before minimum retirement age even though
these payments are shown as wages on your return. See
an earlier year for which you have already filed a return,
you can still start your recovery of contributions in that
Tax Withholding and Estimated Tax
in Part I.
earlier year. To do so, file an amended return for that year
Other Benefits
and each succeeding year for which you have already filed
a return. Generally, an amended return for any year must
be filed within 3 years after the due date for filing your
The tax treatment of certain other benefits is explained in
original return for that year.
this section.
Minimum retirement age. This is the age at which you
Federal Employees’ Compensation Act (FECA). FECA
first could receive an annuity were you not disabled. This
payments you receive for personal injuries or sickness
generally is based on your age and length of service.
resulting from the performance of your duties are like
workers’ compensation. They are tax exempt and are not
Retirement under the Civil Service Retirement Sys-
treated as disability income or annuities. However, pay-
tem (CSRS). In most cases, under the CSRS, the mini-
ments you receive while your claim is being processed,
mum combinations of age and service for retirement are:
including pay while on sick leave and continuation of pay
•
Age 55 with 30 years of service,
for up to 45 days, are taxable.
•
Age 60 with 20 years of service,
Sick pay or disability payments repaid. If you repay
•
sick leave or disability annuity payments you received and
Age 62 with 5 years of service, or
included in income in an earlier year to be eligible for
•
For service as a law enforcement officer, firefighter,
nontaxable FECA benefits for that period, you can deduct
nuclear materials courier, or air traffic controller, age
the amount you repay. You can claim the deduction
50 with 20 years of covered service.
whether you repay the amount yourself or have the FECA
payment sent directly to your employing agency or the
Retirement under the Federal Employees Retire-
OPM.
ment System (FERS). In most cases, the minimum age
Claim the deduction on Schedule A (Form 1040) as a
for retirement under the FERS is between ages 55 and 57
miscellaneous itemized deduction, subject to the 2%-
with at least 10 years of service. With at least 5 years of
of-adjusted-gross-income limit. It is considered a business
service, your minimum retirement age is age 62. Your
loss and may create a net operating loss if your deductions
minimum retirement age with at least 10 years of service is
for the year are more than your income for the year. Get
shown in Table 2.
Publication 536, Net Operating Losses (NOLs) for Individ-
uals, Estates, and Trusts, for more information. The repay-
Table 2. FERS Minimum Retirement Age (MRA) With
ment is not eligible for the special tax credit that applies to
10 Years of Service
repayments over $3,000 of amounts received under a
claim of right.
IF you were born in . . . . . . . THEN Your MRA is
If you repay sick leave or disability annuity payments in
1947 or earlier . . . . . . . . . . . . 55 years.
the same year you receive them, the repayment reduces
1948 . . . . . . . . . . . . . . . . . . . 55 years, 2 months.
your taxable sick leave pay or disability annuity. Do not
1949 . . . . . . . . . . . . . . . . . . . 55 years, 4 months.
deduct it separately.
1950 . . . . . . . . . . . . . . . . . . . 55 years, 6 months.
1951 . . . . . . . . . . . . . . . . . . . 55 years, 8 months.
Terrorist attack. Disability payments for injuries incurred
1952 . . . . . . . . . . . . . . . . . . . 55 years, 10 months.
as a direct result of a terrorist attack directed against the
1953 to 1964 . . . . . . . . . . . . . 56 years.
United States (or its allies) are not included in income. For
1965 . . . . . . . . . . . . . . . . . . . 56 years, 2 months.
more information about payments to survivors of terrorist
1966 . . . . . . . . . . . . . . . . . . . 56 years, 4 months.
attacks, see Publication 3920, Tax Relief for Victims of
1967 . . . . . . . . . . . . . . . . . . . 56 years, 6 months.
Terrorist Attacks.
1968 . . . . . . . . . . . . . . . . . . . 56 years, 8 months.
1969 . . . . . . . . . . . . . . . . . . . 56 years, 10 months.
Military actions. Disability payments for injuries incurred
1970 or later . . . . . . . . . . . . . 57 years.
as a direct result of a military action involving the Armed
Forces of the United States and resulting from actual or
For service as a law enforcement officer, member of the
threatened violence or aggression against the United
Capitol or Supreme Court Police, firefighter, nuclear
States or any of its allies, are not included in income.
materials courier, or air traffic controller, the minimum
retirement age is age 50 with 20 years of covered service
Disability resulting from military service injuries. If
or any age with 25 years of covered service.
you received tax-exempt benefits from the Department of
How to report. You must report all your disability annuity
Veterans Affairs for personal injuries resulting from active
payments received before minimum retirement age on
service in the U.S. Armed Forces and later receive a CSRS
Form 1040 or Form 1040A, line 7, or Form 1040NR, line 8.
or FERS disability annuity for disability arising from the
Disability annuity payments received after you reach that
same injuries, you cannot treat the disability annuity pay-
age are reported as discussed under
How To Report
ments as tax-exempt income. They are subject to the rules
Benefits, earlier in Part II.
described earlier under
Disability
Annuity.
Publication 721 (2011)
Page 17
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