Publication 575 - Introductory Material

What's New

Expanded exception to the tax on early distributions from a governmental plan for qualified public safety employees. For tax years beginning after December 31, 2015, in addition to those employees described in Qualified public safety employees , the definition is expanded to include the following:

  • Federal law enforcement officers,

  • Federal customs and border protection officers,

  • Federal firefighters,

  • Air traffic controllers,

  • Nuclear materials couriers,

  • Members of the United States Capitol Police,

  • Members of the Supreme Court Police, and

  • Diplomatic security special agents of the United States Department of State.

In addition, the exception to the tax is extended to distributions from governmental defined contribution plans, as well as governmental defined benefit plans.For more information, see Tax on Early Distributions later.

Rollovers to SIMPLE Retirement Accounts. Beginning after December 18, 2015, you are able to roll over amounts from a qualified retirement plan (as described under Rollovers, later) or an IRA into a SIMPLE retirement account as follows:

  1. During the first 2 years of participation in a SIMPLE retirement account, you may roll over amounts from one SIMPLE retirement account into another SIMPLE retirement account, and

  2. After the first 2 years of participation in a SIMPLE retirement account, you may roll over amounts from a SIMPLE retirement account, a qualified retirement plan or an IRA into a SIMPLE retirement account.

For more information, see Rollovers later.


Future developments. For the latest information about developments related to Publication 575, such as legislation enacted after it was published, go to

Net investment income tax. For purposes of the net investment income tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). However, these distributions are taken into account when determining the modified adjusted gross income threshold. Distributions from a nonqualified retirement plan are included in net investment income. See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information.

In-plan Roth rollovers.  Starting in 2013, the American Taxpayer Relief Act of 2012 expanded the rules for in-plan Roth rollovers to include more taxpayers. For more information, see In-plan Roth rollovers under Rollovers, discussed later.

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This publication discusses the tax treatment of distributions you receive from pension and annuity plans and also shows you how to report the income on your federal income tax return. How these distributions are taxed depends on whether they are periodic payments (amounts received as an annuity) that are paid at regular intervals over several years or nonperiodic payments (amounts not received as an annuity).

What is covered in this publication?   This publication contains information that you need to understand the following topics.
  • How to figure the tax-free part of periodic payments under a pension or annuity plan, including using a simple worksheet for payments under a qualified plan.

  • How to figure the tax-free part of nonperiodic payments from qualified and nonqualified plans, and how to use the optional methods to figure the tax on lump-sum distributions from pension, stock bonus, and profit-sharing plans.

  • How to roll over certain distributions from a retirement plan into another retirement plan or IRA.

  • How to report disability payments, and how beneficiaries and survivors of employees and retirees must report benefits paid to them.

  • How to report railroad retirement benefits.

  • When additional taxes on certain distributions may apply (including the tax on early distributions and the tax on excess accumulation).

For additional information on how to report pension or annuity payments on your federal income tax return, be sure to review the instructions on the back of Copies B, C, and 2 of the Form 1099-R that you received and the instructions for Form 1040, lines 16a and 16b (Form 1040A, lines 12a and 12b or Form 1040NR, lines 17a and 17b).

A “corrected” Form 1099-R replaces the corresponding original Form 1099-R if the original Form 1099-R contained an error. Make sure you use the amounts shown on the corrected Form 1099-R when reporting information on your tax return.

What is not covered in this publication?   The following topics are not discussed in this publication.

The General Rule.   This is the method generally used to determine the tax treatment of pension and annuity income from nonqualified plans (including commercial annuities). For a qualified plan, you generally cannot use the General Rule unless your annuity starting date is before November 19, 1996. Although this publication will help you determine whether you can use the General Rule, it will not help you use it to determine the tax treatment of your pension or annuity income. For that and other information on the General Rule, see Publication 939, General Rule for Pensions and Annuities.

Individual retirement arrangements (IRAs).   Information on the tax treatment of amounts you receive from an IRA is in Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs).

Civil service retirement benefits.   If you are retired from the federal government (regular, phased, or disability retirement) or are the survivor or beneficiary of a federal employee or retiree who died, get Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits. Publication 721 covers the tax treatment of federal retirement benefits, primarily those paid under the Civil Service Retirement System (CSRS) or the Federal Employees' Retirement System (FERS). It also covers benefits paid from the Thrift Savings Plan (TSP).

Social security and equivalent tier 1 railroad retirement benefits.   For information about the tax treatment of these benefits, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. However, this publication (575) covers the tax treatment of the non-social security equivalent benefit portion of tier 1 railroad retirement benefits, tier 2 benefits, vested dual benefits, and supplemental annuity benefits paid by the U.S. Railroad Retirement Board.

Tax-sheltered annuity plans (403(b) plans).   If you work for a public school or certain tax-exempt organizations, you may be eligible to participate in a 403(b) retirement plan offered by your employer. Although this publication covers the treatment of benefits under 403(b) plans and discusses in-plan Roth rollovers from 403(b) plans to designated Roth accounts, it does not cover other tax provisions that apply to these plans. For that and other information on 403(b) plans, see Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations.

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Tax questions.   If you have a tax question not answered by this publication, check and How To Get Tax Help at the end of this publication.

Useful Items - You may want to see:


  • 524 Credit for the Elderly or the Disabled

  • 525 Taxable and Nontaxable Income

  • 560 Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans)

  • 571 Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations

  • 590-A Contributions to Individual Retirement Arrangements (IRAs)

  • 590-B Distributions from Individual Retirement Arrangements (IRAs)

  • 721 Tax Guide to U.S. Civil Service Retirement Benefits

  • 915 Social Security and Equivalent Railroad Retirement Benefits

  • 939 General Rule for Pensions and Annuities

Form (and Instructions)

  • W-4P Withholding Certificate for Pension or Annuity Payments

  • 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

  • 4972 Tax on Lump-Sum Distributions

  • 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts

See How To Get Tax Help near the end of this publication for information about getting publications and forms.

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