Publication 721 - Tax Guide To U.s. Civil Service Retirement Benefits - 2002 Page 11
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28Worksheet C. Limited Taxable Amount
If your annuity is a mixture of community income and
for Nonresident Alien
separate income, you must divide it between the two kinds
of income. The division is based on your periods of service
1. Enter the otherwise taxable amount of
and domicile in community and noncommunity property
the CSRS or FERS annuity (from line
states while you were married.
9 of Worksheet A) or TSP
For more information, see Publication 555, Community
distributions . . . . . . . . . . . . . . . . . . . 1.
Property.
2. Enter the total U.S. Government basic
pay other than tax-exempt pay for
Reemployment After Retirement
services performed outside the United
States . . . . . . . . . . . . . . . . . . . . . . . 2.
If you retired from federal service and are later reemployed
3. Enter the total U.S. Government basic
by the federal government, you can continue to receive
pay for all services . . . . . . . . . . . . . . 3.
your annuity during reemployment. The employing agency
4. Divide line 2 by line 3 . . . . . . . . . . . . 4.
usually will pay you the difference between your salary for
your period of reemployment and your annuity. This
5. Limited taxable amount. Multiply
amount is taxable as wages. Your annuity will continue to
line 1 by line 4. Enter this amount on
be taxed just as it was before. If you are still recovering
Form 1040NR, line 17b . . . . . . . . . . . 5.
your cost, you continue to do so. If you have recovered
your cost, the annuity you receive while you are reem-
ployed generally is fully taxable.
Example 1. You are a nonresident alien who performed
all services for the U.S. Government abroad as a nonresi-
Nonresident Aliens
dent alien. You retired and began to receive a monthly
annuity of $200. Your total basic pay for all services for the
The following special rules apply to nonresident alien fed-
U.S. Government was $100,000.
eral employees performing services outside the United
The taxable amount of your annuity using Worksheet A
States and to nonresident alien retirees and beneficiaries.
in this publication is $720. You are a nonresident alien, so
you figure the limited taxable amount of your annuity as
Special rule for figuring your total contributions. Your
follows.
contributions to the retirement plan (your cost) also include
the government’s contributions to the plan to a certain
Worksheet C. Limited Taxable Amount
extent. You include government contributions that would
for Nonresident Alien — Example 1
not have been taxable to you at the time they were contrib-
uted if they had been paid directly to you. For example,
1. Enter the otherwise taxable amount of
government contributions would not have been taxable to
the CSRS or FERS annuity (from line
you if, at the time made, your services were performed
9 of Worksheet A) or TSP
outside the United States. Thus, your cost is increased by
distributions . . . . . . . . . . . . . . . . . . . 1. $
720
government contributions that you would have excluded as
2. Enter the total U.S. Government basic
income from foreign services if you had received them
pay other than tax-exempt pay for
directly as wages. This reduces the benefits that you, or
services performed outside the United
your beneficiary, must include in income.
States . . . . . . . . . . . . . . . . . . . . . . . 2.
0
This method of figuring your total contributions does not
3. Enter the total U.S. Government basic
apply to any contributions the government made on your
pay for all services . . . . . . . . . . . . . . 3.
100,000
behalf after you became a citizen or resident of the United
4. Divide line 2 by line 3 . . . . . . . . . . . . 4.
0
States.
5. Limited taxable amount. Multiply
Limit on taxable amount. There is a limit on the taxable
line 1 by line 4. Enter this amount on
amount of payments received from the CSRS, the FERS,
Form 1040NR, line 17b . . . . . . . . . . . 5.
0
or the TSP by a nonresident alien retiree or nonresident
alien beneficiary. This limited taxable amount is in the
same proportion to the otherwise taxable amount that the
Example 2. You are a nonresident alien who performed
retiree’s total U.S. Government basic pay, other than
services for the U.S. Government as a nonresident alien
tax-exempt pay for services performed outside the United
both within the United States and abroad. You retired and
States, is to the retiree’s total U.S. Government basic pay
began to receive a monthly annuity of $240.
for all services.
Your total basic pay for your services for the U.S. Gov-
Basic pay includes regular pay plus any standby differ-
ernment was $120,000 —$40,000 was for work done in the
ential. It does not include bonuses, overtime pay, certain
United States and $80,000 was for your work done in a
retroactive pay, uniform or other allowances, or lump-sum
foreign country.
leave payments.
The taxable amount of your annuity figured using Work-
To figure the limited taxable amount of your CSRS or
sheet A in this publication is $1,980. You are a nonresident
FERS annuity or your TSP distributions, use the following
alien, so you figure the limited taxable amount of your
worksheet. (For an annuity, first complete Worksheet A in
this publication.)
annuity as follows.
Page 11
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