Publication 721 - Tax Guide To U.s. Civil Service Retirement Benefits - 2002 Page 2
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28Useful Items
Important Reminder
You may want to see:
Publication
Photographs of missing children. The Internal Reve-
nue Service is a proud partner with the National Center for
524
Credit for the Elderly or the Disabled
Missing and Exploited Children. Photographs of missing
575
Pension and Annuity Income
children selected by the Center may appear in this publica-
tion on pages that would otherwise be blank. You can help
590
Individual Retirement Arrangements (IRAs)
bring these children home by looking at the photographs
939
General Rule for Pensions and Annuities
and calling 1 – 800 –THE –LOST (1 – 800 –843 –5678) if
you recognize a child.
Form (and Instructions)
CSA 1099R Statement of Annuity Paid
Introduction
CSF 1099R Statement of Survivor Annuity Paid
This publication explains how the federal income tax rules
1099 –R Distributions From Pensions, Annuities,
apply to civil service retirement benefits received by retired
Retirement or Profit-Sharing Plans, IRAs,
federal employees (including those disabled) or their survi-
Insurance Contracts, etc.
vors. These benefits are paid primarily under the Civil
Service Retirement System (CSRS) or the Federal Em-
5329 Additional Taxes on Qualified Plans (including
ployees Retirement System (FERS).
IRAs) and Other Tax-Favored Accounts
Tax rules for annuity benefits. Part of the annuity bene-
See How To Get Tax Help near the end of this publica-
fits you receive is a tax-free recovery of your contributions
tion for information about getting publications and forms.
to the CSRS or FERS. The rest of your benefits are
taxable. If your annuity starting date is after November 18,
Part I
1996, you must use the Simplified Method to figure the
taxable and tax-free parts. If your annuity starting date is
General Information
before November 19, 1996, you generally could have cho-
sen to use the Simplified Method or the General Rule. See
Part II, Rules for Retirees.
This part of the publication contains information that can
apply to most recipients of civil service retirement benefits.
Thrift Savings Plan. The Thrift Savings Plan (TSP) pro-
vides federal employees with the same savings and tax
Refund of Contributions
benefits that many private employers offer their employ-
ees. This plan is similar to private sector 401(k) plans. You
If you leave federal government service or transfer to a job
can defer tax on part of your pay by having it contributed to
not under the CSRS or FERS and you are not eligible for
your account in the plan. The contributions and earnings
an immediate annuity, you can choose to receive a refund
on them are not taxed until they are distributed to you. See
of the money in your CSRS or FERS retirement account.
Thrift Savings Plan in Part II.
The refund will include both regular and voluntary contribu-
Comments and suggestions. We welcome your com-
tions you made to the fund, plus any interest payable.
ments about this publication and your suggestions for
If the refund includes only your contributions, none of
future editions.
the refund is taxable. If it includes any interest, the interest
You can e-mail us while visiting our web site at
is taxable unless you roll it over into another qualified plan
or a traditional individual retirement arrangement (IRA). If
You can write to us at the following address:
you do not have the Office of Personnel Management
(OPM) transfer the interest to an IRA or other plan in a
Internal Revenue Service
direct rollover, tax will be withheld at a 20% rate. See
Tax Forms and Publications
Rollover Rules in Part II for information on how to make a
W:CAR:MP:FP
rollover.
1111 Constitution Ave. NW
If you do not roll over interest included in your refund, it
Washington, DC 20224
may qualify as a lump-sum distribution eligible for capital
gain treatment or the 10-year tax option. If you separate
We respond to many letters by telephone. Therefore, it
from service before the calendar year in which you reach
would be helpful if you would include your daytime phone
age 55, it may be subject to an additional 10% tax on early
number, including the area code, in your correspondence.
distributions. For more information, see Lump-Sum Distri-
butions and Tax on Early Distributions in Publication 575.
Page 2
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