Get Answers To Your Tax Questions
H&R Block Tax Professionals relentlessly focus on making sure you profit from every deduction and credit available.
If so, your survivor payments are fully taxable.The retiree might have been reporting the annuity payments under the general rule. If so, you must apply the same exclusion percentage to your initial survivor annuity payment called for in the contract. The resulting tax-free amount will then remain fixed. Any increases in the survivor annuity are fully taxable. ">
Finding answers to your tax questions is now less taxing.
Are survivor-annuity payments taxable?
Usually, a survivor or beneficiary reports pension or annuity income in the same way the plan participant would have. However, some special rules apply.
You can exclude part of each annuity payment as a tax-free recovery of the employee's investment in the contract if both of these are true:
You must figure the taxable and tax-free parts of your annuity payments using the method that applies as if you were the employee:
If so, your survivor payments are fully taxable.