Publication 721 - Tax Guide To U.s. Civil Service Retirement Benefits - 2011 Page 3
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31the tax to be shown on your 2012 return. For more informa-
Part I
tion, including exceptions to the penalty, see chapter 4 of
Publication 505, Tax Withholding and Estimated Tax.
General Information
Form CSA 1099R. Form CSA 1099R is mailed to you by
OPM each year. It will show any tax you had withheld. File
This part of the publication contains information that can
a copy of Form CSA 1099R with your tax return if any
apply to most recipients of civil service retirement benefits.
federal income tax was withheld.
You also can view and download your Form CSA
Refund of Contributions
1099R by visiting the OPM website at
To log in, you will
If you leave federal government service or transfer to a job
need your retirement CSA claim number and your personal
not under the CSRS or FERS and you are not eligible for
identification number.
an immediate annuity, you can choose to receive a refund
of the money in your CSRS or FERS retirement account.
Choosing no withholding on payments outside the
The refund will include both regular and voluntary contribu-
United States. The choice for no withholding generally
tions you made to the fund, plus any interest payable.
cannot be made for annuity payments to be delivered
If the refund includes only your contributions, none of
outside the United States and its possessions.
the refund is taxable. If it includes any interest, the interest
To choose no withholding if you are a U.S. citizen or
is taxable unless you roll it over directly into another quali-
resident alien, you must provide OPM with your home
fied plan or a traditional individual retirement arrangement
address in the United States or its possessions. Otherwise,
(IRA). If you do not have the Office of Personnel Manage-
OPM has to withhold tax. For example, OPM must withhold
ment (OPM) transfer the interest to an IRA or other plan in
if you provide a U.S. address for a nominee, trustee, or
a direct rollover, tax will be withheld at a 20% rate. See
agent (such as a bank) to whom the benefits are to be
Rollover Rules
in Part II for information on how to make a
delivered, but you do not provide your own U.S. home
rollover.
address.
If you do not provide a home address in the United
Interest is not paid on contributions to the CSRS
States or its possessions, you can choose not to have tax
for service after 1956 unless your service was for
TIP
withheld only if you certify to OPM that you are not a U.S.
more than 1 year but not more than 5 years.
citizen, a U.S. resident alien, or someone who left the
Therefore, many employees who withdraw their contribu-
United States to avoid tax. But if you so certify, you may be
tions under the CSRS do not get interest and do not owe
subject to the 30% flat rate withholding that applies to
any tax on their refund.
nonresident aliens. For details, see Publication 519, U.S.
If you do not roll over interest included in your refund, it
Tax Guide for Aliens.
may qualify as a lump-sum distribution eligible for capital
gain treatment or the 10-year tax option. If you separate
Withholding certificate. If you give OPM a Form
from service before the calendar year in which you reach
W-4P-A, Election of Federal Income Tax Withholding, you
age 55, it may be subject to an additional 10% tax on early
can choose not to have tax withheld or you can choose to
distributions. For more information, see Lump-Sum Distri-
have tax withheld. The amount of tax withheld depends on
butions and Tax on Early Distributions in Publication 575.
your marital status, the number of withholding allowances,
and any additional amount you designate to be withheld. If
A lump-sum distribution is eligible for capital gain
you do not make either of these choices, OPM must with-
!
treatment or the 10-year tax option only if the plan
hold as if you were married with three withholding al-
participant was born before January 2, 1936.
CAUTION
lowances.
To change the amount of tax withholding or to
Tax Withholding
stop withholding, call OPM’s Retirement Informa-
and Estimated Tax
tion Office at 1-888-767-6738 (customers within
the local Washington, D.C. calling area must call
The CSRS or FERS annuity you receive is subject to
202-606-0500). No special form is needed. You will need
federal income tax withholding, unless you choose not to
your retirement CSA or CSF claim number, your social
have tax withheld. OPM will tell you how to make the
security number, and your personal identification number
choice. The choice for no withholding remains in effect until
(PIN) when you call. If you have TTY/TDD equipment call
you change it. These withholding rules also apply to a
1-877-255-7408. If you need a PIN, call OPM’s Retirement
Information Office.
disability annuity, whether received before or after mini-
mum retirement age.
You also can change the amount of withholding
If you choose not to have tax withheld, or if you do not
or stop withholding online by visiting the OPM
have enough tax withheld, you may have to make esti-
website at You will
mated tax payments.
need your retirement CSA or CSF claim number and your
PIN.
You may owe a penalty if the total of your with-
!
held tax and estimated tax does not cover most of
Withholding from certain lump-sum payments. If you
the tax shown on your return. Generally, you will
leave the federal government before becoming eligible to
CAUTION
owe the penalty for 2012 if the additional tax you must pay
retire and you apply for a refund of your CSRS or FERS
with your return is $1,000 or more and more than 10% of
contributions, or you die without leaving a survivor eligible
Publication 721 (2011)
Page 3
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