Simplified Method Worksheet—Lines 5aand 5b

Simplified Method Worksheet—Lines 5aand 5b

Summary: This is the simplified method worksheet. It is used to figure the taxable part of your pension or annuity using the simplified method.

Before you begin: If you are the beneficiary of a deceased employee or former employee who died before August 21, 1996, include any death benefit exclusion that you are entitled to (up to $5,000) in the amount entered on line 2 below.

Note. If you had more than one partially taxable pension or annuity, figure the taxable part of each separately. Enter the total of the taxable parts on Form 1040 or 1040-SR, line 5b. Enter the total pension or annuity payments received in 2021 on Form 1040 or 1040-SR, line 5a.

The line items to be completed are:

"1. Enter the total pension or annuity payments from Form 1099-R, box 1. Also, enter this amount on Form 1040 or 1040-SR, line 5a." field
"2. Enter your cost in the plan at the annuity starting date. Note. If you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year’s worksheet on line 4 below (even if the amount of your pension or annuity has changed). Otherwise, go to line 3." field
"3. Enter the appropriate number from Table 1 below. But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below." field
"4. Divide line 2 by the number on line 3." field
"5. Multiply line 4 by the number of months for which this year’s payments were made. If your annuity starting date was before 1987, skip lines 6 and 7 and enter this amount on line 8. Otherwise, go to line 6." field
"6. Enter the amount, if any, recovered tax free in years after 1986. If you completed this worksheet last year, enter the amount from line 10 of last year’s worksheet." field
"7.Subtract line 6 from line 2." field
"8. Enter the smaller of line 5 or line 7." field
"9. Taxable amount. Subtract line 8 from line 1. Enter the result, but not less than zero. Also, enter this amount on Form 1040 or 1040-SR, line 5b. If your Form 1099-R shows a larger amount, use the amount on this line instead of the amount from Form 1099-R. If you are a retired public safety officer, see Insurance Premiums for Retired Public Safety Officers before entering an amount on line 5b." field
"10. Was your annuity starting date before 1987?"
"Yes. STOP. Leave line 10 blank."checkbox
"No. Add lines 6 and 8. This is the amount you have recovered tax free through 2021. You will need this number when you fill out this worksheet next year." checkbox, field

Table 1 for Line 3 Above

IF the age at annuity starting date wasAND your annuity starting date was before November 19, 1996, enter on line 3AND your annuity starting date was after November 18, 1996, enter on line 3
55 or under300360
56–60260310
61–65240260
66–70170210
71 or older120160

Table 2 for Line 3 Above

IF the combined ages at annuity starting date wereTHEN enter on line 3
110 or under410
111–120360
121–130310
131–140260
141 or older210