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Retire FAQ

Question

How is the tax free portion of my annuity determined?

Answer

Use our online calculator to compute the tax free portion of your annuity.
http://apps.opm.gov/tax_calc/index.cfm

Read about how the tax free portion of your annuity is determined.

Your retirement contributions are shown on the 1099R form we send you each January for tax filing purposes.

You can find information about computing the taxable portion of your annuity by going to IRS Publication 721 (Tax Guide to U.S. Civil Service Retirement Benefits) on the Internal Revenue Service website. Search for Publication 721 and refer to “Part II Rules for Retirees”. You will find detailed information for disability and non-disability retirees, along with worksheets for computing the taxable portion.

If your non-disability annuity started on/after July 2, 1986, a portion of each annuity payment is taxable and a portion is considered a tax-free recovery of your contributions to the retirement fund. If you retired under the disability provision, the disability annuity you receive from CSRS or FERS is taxable as wages until you reach minimum retirement age. Your retirement contributions are shown on the 1099R form we send you each January for tax filing purposes.

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