Publication 575 (2023): Pension And Annuity Income

Publication 575 is an official resource from the Internal Revenue Service (IRS) that guides individuals on pension and annuity income taxation. It clarifies how to report these distributions on your federal income tax return.

What is Publication 575?

Publication 575, issued annually by the Internal Revenue Service (IRS), is a guide for individuals receiving payments from pension and annuity plans. It explains how to determine the tax treatment of these distributions and report them accurately on your federal income tax return.

Who should use Publication 575?

Individuals receiving payments from pension or annuity plans, including the Thrift Savings Plan (TSP) and certain railroad retirement benefits.

What's the purpose of Publication 575?

It explains how to determine the taxable portion of your distributions and how to report them on your tax return.

What types of distributions covered in Publication 575?

A. Periodic payments: Received regularly over several years (e.g., monthly retirement checks).

B. Nonperiodic payments: One-time distributions (e.g., lump-sum payouts).

C. Tax treatment: Depends on whether the plan is qualified (e.g., employer-sponsored 401(k) or traditional IRA) or nonqualified (e.g., certain individual retirement annuities).

D. Qualified plans: Generally, a portion of the distribution may be tax-free, representing your non-taxable contributions. The remaining portion is taxed as ordinary income.

E. Nonqualified plans: Generally, the entire distribution is taxed as ordinary income.

For the current year's Publication 575, click here.