Fillable Form 4972 - Tax On Lump-Sum Distributions

Page

Form 4972 (2012)

Section references are to the Internal

distribution using the 10-year tax option

the distribution is partially rolled over to

Revenue Code.

whether or not you make the 20% capital

another qualified plan or an IRA.

gain election.

Future developments. For the latest

• Any distribution if an earlier election to

information about developments related to

Where to report. Report amounts from

use either the 5- or 10-year tax option had

Form 4972 and its instructions, such as

your Form 1099-R either directly on your

been made after 1986 for the same plan

legislation enacted after they were

tax return (Form 1040, 1040NR, or 1041) or

participant.

published, go to

on Form 4972.

• U.S. Retirement Plan Bonds distributed

1. If you do not use Form 4972, and you

General Instructions

with the lump sum.

file:

• A distribution made during the first 5 tax

a. Form 1040. Report the entire amount

Purpose of Form

years that the participant was in the plan,

from box 1 (Gross distribution) of Form

unless it was paid because the participant

Use Form 4972 to figure the tax on a

1099-R on line 16a, and the taxable

died.

qualified lump-sum distribution (defined

amount on line 16b. If your pension or

• The current actuarial value of any annuity

below) you received in 2012 using the 20%

annuity is fully taxable, enter the amount

contract included in the lump sum (Form

capital gain election, the 10-year tax

from box 2a (Taxable amount) of Form

1099-R, box 8, should show this amount,

option, or both. These are special formulas

1099-R on line 16b; do not make an entry

which you use only to figure tax on the

used to figure a separate tax on the

on line 16a.

ordinary income part of the distribution).

distribution that may result in a smaller tax

b. Form 1040NR. Report the entire

• A distribution to a 5% owner that is

than if you reported the taxable amount of

amount from box 1 (Gross distribution) of

subject to penalties under section

the distribution as ordinary income.

Form 1099-R on line 17a, and the taxable

72(m)(5)(A).

You pay the tax only once, for the year

amount on line 17b. If your pension or

you receive the distribution, not over the

• A distribution from an IRA.

annuity is fully taxable, enter the amount

next 10 years. The separate tax is added to

from box 2a (Taxable amount) of Form

• A distribution from a tax-sheltered

the regular tax figured on your other

1099-R on line 17b; do not make an entry

annuity (section 403(b) plan).

income.

on line 17a.

• A distribution of the redemption proceeds

c. Form 1041. Report the amount on

Related Publications

of bonds rolled over tax free to a qualified

line 8.

pension plan, etc., from a qualified bond

Pub. 575, Pension and Annuity Income.

purchase plan.

2. If you do not use Part III of Form 4972,

Pub. 721, Tax Guide to U.S. Civil Service

but use Part II, report only the ordinary

• A distribution from a qualified plan if the

Retirement Benefits.

income portion of the distribution on Form

participant or his or her surviving spouse

Pub. 939, General Rule for Pensions and

1040, lines 16a and 16b, on Form 1040NR,

previously received an eligible rollover

Annuities.

lines 17a and 17b, or on Form 1041, line 8.

distribution from the same plan (or another

The ordinary income portion is the amount

plan of the employer that must be

What Is a Qualified

from box 2a of Form 1099-R, minus the

combined with that plan for the lump-sum

Lump-Sum Distribution?

amount from box 3 of that form.

distribution rules) and the previous

distribution was rolled over tax free to

3. If you use Part III of Form 4972, do not

It is the distribution or payment in 1 tax

another qualified plan or an IRA.

include any part of the distribution on Form

year of a plan participant’s entire balance

1040, lines 16a and 16b, on Form 1040NR,

• A distribution from a qualified plan that

from all of an employer’s qualified plans of

lines 17a and 17b, or on Form 1041, line 8.

received a rollover after 2001 from an IRA

one kind (for example, pension, profit-

(other than a conduit IRA), a governmental

The entries in other boxes on Form

sharing, or stock bonus plans) in which the

section 457 plan, or a section 403(b) tax-

1099-R may also apply in completing

participant had funds. The participant’s

sheltered annuity on behalf of the plan

Form 4972.

entire balance does not include deductible

participant.

voluntary employee contributions or certain

• Box 6 (Net unrealized appreciation in

• A distribution from a qualified plan that

forfeited amounts. The participant must

employer’s securities). See Net unrealized

received a rollover after 2001 from another

have been born before January 2, 1936.

appreciation (NUA) on page 3.

qualified plan on behalf of that plan

Distributions upon death of the plan

• Box 8 (Other). Current actuarial value of

participant’s surviving spouse.

participant. If you received a qualifying

an annuity.

• A corrective distribution of excess

distribution as a beneficiary after the

If applicable, get the amount of federal

deferrals, excess contributions, excess

participant’s death, the participant must

estate tax paid attributable to the taxable

aggregate contributions, or excess annual

have been born before January 2, 1936, for

part of the lump-sum distribution from the

additions.

you to use this form for that distribution.

administrator of the deceased’s estate.

• A lump-sum credit or payment under the

Distributions to alternate payees. If you

How Often You Can Use

alternative annuity option from the Federal

are the spouse or former spouse of a plan

Form 4972

Civil Service Retirement System (or the

participant who was born before January 2,

Federal Employees’ Retirement System).

1936, and you received a qualified lump-

After 1986, you can use Form 4972 only

sum distribution as an alternate payee

once for each plan participant. If you

How To Report the Distribution

under a qualified domestic relations order,

receive more than one lump-sum

you can use Form 4972 to make the 20%

If you can use Form 4972, attach it to Form

distribution for the same participant in 1 tax

capital gain election and use the 10-year

1040 (individuals), Form 1040NR

year, you must treat all those distributions

tax option to figure your tax on the

(nonresident aliens), or Form 1041 (estates

the same way. Combine them on a single

distribution.

or trusts). The payer should have given you

Form 4972.

a Form 1099-R or other statement that

See How To Report the Distribution on

If you make an election as a beneficiary

shows the amounts needed to complete

this page.

of a deceased participant, it does not affect

Form 4972. The following choices are

any election you can make for qualified

Distributions That Do Not Qualify

available.

lump-sum distributions from your own

for the 20% Capital Gain Election

20% capital gain election. If there is an

plan. You can also make an election as the

or the 10-Year Tax Option

amount in Form 1099-R, box 3, you can

beneficiary of more than one qualifying

use Form 4972, Part II, to apply a 20% tax

person.

The following distributions are not qualified

rate to the capital gain portion. See Capital

lump-sum distributions and do not qualify

Example. Your mother and father died

Gain Election on page 3.

for the 20% capital gain election or the 10-

and each was born before January 2, 1936.

10-year tax option. You can use Part III to

year tax option.

Each had a qualified plan of which you are

figure your tax on the lump-sum

• The part of a distribution not rolled over if

Form 4972 - Tax On Lump-Sum Distributions - 2012 Page 2

Related Articles

Related forms

Related Categories